Are There Any Other Changes
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For the purposes of calculating the credit in the 2021 tax year, taxpayers could choose to use their 2019 income if it was higher than 2021, according to a Senate aide.
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People who otherwise would be eligible but whose children do not have Social Security numbers will be permitted to claim the version of the credit available to childless households. This change is permanent.
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Taxpayers wont be disqualified for the credit in 2021 until they have investment income of $10,000, up from $3,650. This change will be permanent, with the $10,000 threshold indexed to inflation.
Pandemic Emergency Unemployment Compensation
The CARES Act also established the Pandemic Emergency Unemployment Compensation program, which allowed workers who had exhausted their unemployment compensation benefits to receive 13 more weeks of benefits, if they were able to work. Also, the Pandemic Unemployment Assistance extended benefits to self-employed individuals, freelancers, and independent contractors.
For workers who remained employed but with reduced hours, the stimulus plan funded 100% of state short-term compensation benefits, and provided incentives for states that did not have such benefits to implement them.
The benefits under the PEUC program that expired on Dec. 31, 2020, were extended to March 14, 2021, as a result of the Continued Assistance for Unemployed Workers Act of 2020 . The act was passed by the U.S. Congress and signed into law by President Trump on Dec. 27, 2020, as part of the Consolidated Appropriations Act , 2021. Also, individuals were able to collect unemployment benefits for an additional 24 weeks .
Again, as of Sept. 5, 2021, all pandemic-related unemployment benefits have ended, although some states stopped them even earlier.
Payments Based On 2019 Or 2020 Tax Return
The amount of your third stimulus check will be based on either your 2019 or 2020 return. If your 2020 tax return isn’t filed and processed by the time the IRS is ready to send your third stimulus payment, the tax agency will use information from your 2019 tax return. If your 2020 tax return is already filed and processed when the IRS starts to process your payment, then your stimulus check will be based on information found on that return. If your 2020 return is filed and/or processed after the IRS sends you a stimulus check, but before July 15, 2021 , a second payment will be sent to you for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return.
If you haven’t already filed your 2020 tax return, this will create some opportunities to “game” the system and increase the amount of your third stimulus check. For instance, if you’ll get a larger check based on your 2020 tax return, than you might want to quickly file your 2020 return electronically and have your third stimulus check based on that return. If you’ll get a bigger check if it’s based on your 2019 return, then just wait until after your payment is sent to file your 2020 return. For more on this, see How Filing Your Tax Return Early Could Boost Your Third Stimulus Check.
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Check : The $1400 Third Stimulus Payment
The $1,400 stimulus check has already gone out to tens of millions of Americans, with more batches of payments going out over the coming weeks — you can track the status of your payment. Under new eligibility rules, some folks who qualified for the first two payments may not make the cut for the third. A hard ceiling on income, designed to exclude higher earners from getting a check, comes with a rule change regarding the use of dependents in the stimulus check formula. Check out our stimulus payment calculator to see how the income cap affects you.
The new legislation gives the IRS a deadline of Dec. 31 to finish sending the stimulus checks.
$166 Billion In Direct Checks
Individuals making up to $75,000 a year will receive a payment of $600, while couples making up to $150,000 will receive $1,200, in addition to $600 per child. The deal also makes the stimulus checks more accessible to immigrant families. Treasury Secretary Steven Mnuchin said Monday that the checks could go out as soon as next week.
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Emergency Rental Assistance And Eviction Moratoriums
- The agreement extends until Jan. 31 a moratorium on evictions that was slated to expire at the end of the year. The incoming Biden administration can extend the deadline further.
- The bill includes $25 billion in emergency assistance to renters.
Border Wall Status Quo
The government funding portion of the year-end package would maintain nearly $1.4 billion in cash for Trumps southern border wall, in addition to $20 million for new border processing coordinators. The bill also includes $15 billion for Customs and Border Protection, nearly $8 billion for Immigration and Customs Enforcement and $840 million in emergency cash to help ports of entry cover revenue losses during the pandemic. Theres no new funding for an increased number of border patrol agents or immigration enforcement personnel.
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How Does This Change Student Loan Payments
The time limit enforced for students to receive help from the federal government to assist in paying their student loan interest has been lifted. Prior to the stimulus package, if a student took what was considered too long to finish school, they would receive no more help from the government in paying off their interest. More students and incarcerated people would also be eligible for Pell Grants.
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What’s Going On With The Student Loan Debt Forgiveness
In March, President Joe Biden’s administration approved a $1 billion loan forgiveness for students who were defrauded by their colleges, or if their school shut down. The change is projected to affect 73,000 people.
Though forgiving student loan debt has been part of the discussion since January, Senate Democrats and the president have different dollar figures in mind for how much to cancel. Biden on Feb. 16 said he supports canceling $10,000 in student debt per borrower and extending the pause on student loan repayment. His figure is at odds with a Senate Democrat proposal, however, that calls for canceling up to $50,000 in student debt per borrower.
“I do think that, in this moment of economic pain and strain, that we should be eliminating interest on the debts that are accumulated, No. 1. And No. 2, I’m prepared to write off the $10,000 debt, but not $50,000,” Biden said. While the House and Senate versions of the bill don’t forgive student debt, the legislation includes a provision that will make tax-free any forgiven student loan, according to The New York Times.
Canceling student debt didn’t make the bill.
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House Passes $19 Trillion Stimulus Bill With A Variety Of Small Business Relief
The U.S. House of Representatives passed, by a vote of 219212, a $1.9 trillion COVID-19 relief package early Saturday morning that includes $1,400 stimulus checks to individuals, an extension of unemployment benefits, and tens of billions in aid for small businesses and not-for-profits.
The bill, titled the American Rescue Plan Act of 2021, H.R. 1319, also includes phased increases in the minimum wage that would bring it to $15 an hour by 2025. That part of the bill likely will not be considered in the bill’s next stop, the Senate. That’s because the Senate parliamentarian ruled Thursday that the minimum wage hike could not be part of the bill because it is being considered using budget-reconciliation rules, which clears the way for the Senate to pass the legislation by a simple majority.
Vice President Kamala Harris could overrule the Senate parliamentarian but was not expected to do so. This would guarantee that any bill passed by the Senate would be different from the House version, requiring changes and likely follow-up votes by both chambers in March.
The American Rescue Plan Act includes numerous tax provisions, including a $1,400 recovery rebate credit plus $1,400 for each dependent for 2021. Advance payments of the credit will be sent to individuals as economic impact payment checks. For more details, see the JofA article “Tax Provisions in the American Rescue Plan Act.”
The bill also includes:
Small business items
PPP funding
What Happens To The Supplemental Payments
If you qualify for any benefits, you will also receive the full $300 supplemental payment for weeks ending after March 14 and through Sept. 6. Known as F.P.U.C., its called the federal pandemic unemployment compensation.
The stimulus package also extends an extra $100 weekly payment, called the mixed-earner supplement, through Sept. 6. This payment helps people who have a mix of income from both self-employment and wages paid by other employers, because they are often stuck with a lower state-issued benefit based on their wages.
The legislation also clarifies that the $300 federal supplement will not be counted when calculating eligibility for Medicaid and the Childrens Health Insurance Program. The mixed earner supplement, however, will be counted.
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An Expanded Child And Family Tax Credit
Currently, parents can claim a child tax credit valued at up to $2,000 per child — but the credit is only partly refundable, so lower-income Americans who don’t pay at least $2,000 in taxes can’t take full advantage of the credit. The legislation increases the amount parents can receive in 2021 and makes the credit fully refundable. The credit will be worth $3,600 for children under six and $3,000 for kids from six to 18.
President Biden Announces American Rescue Plan
Emergency Legislative Package to Fund Vaccinations, Provide Immediate, Direct Relief to Families Bearing the Brunt of the COVID-19 Crisis, and Support Struggling Communities
The COVID-19 pandemic and the corresponding economic crisis are devastating families across the country. More than 20 million Americans have contracted COVID-19, and at least 370,000 have died. From big cities to small towns, too many Americans are barely scraping by, or not scraping by at all. And the pandemic has shined a light on the persistence of racial injustice in our healthcare system and our economy. The need to act is clear in the lines at food banks, the small businesses that are closed or closing, and the growing number of Americans experiencing housing insecurity. After nearly a year of the public health crisis, our nation remains in this dark winter of the pandemic and facing a deep economic crisis.
President Biden is laying out the first step of an aggressive, two-step plan for rescue, from the depths of this crisis, and recovery, by investing in America, creating millions of additional good-paying jobs, combatting the climate crisis, advancing racial equity, and building back better than before.
As last months jobs report underscored, the virus and our economy are intertwined. We cannot rescue our economy without containing this virus.
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Could I End Up Having To Pay Any Of It Back
Conceivably, yes.
A taxpayer may receive too much money from the advance payments in certain situations, such as a change in income or filing status, or if they no longer claim a child as a dependent.
This could cause you to owe money at tax time or reduce your refund.
But the legislation mitigates the danger in a couple of ways. First, only half of the credit is paid in advance. And the law also says that if the wrong amount was paid because of changes in the number of qualifying children, up to $2,000 per child would not need to be paid back by taxpayers who fall below certain income thresholds: $40,000 for a single taxpayer, $50,000 for a head of household, and $60,000 for joint filers. People whose income is above those thresholds may receive partial protection, which phases out as they earn more, tax experts said.
The stimulus package requires the establishment of an online portal to allow taxpayers to opt out of receiving advance payments and update information about their income, marital status and number of qualifying children.
No New Student Loan Forgiveness Under The Law
The stimulus plan, however, doesn’t cancel any student loan debt. But if the federal government forgives student loans between now and through 2025, the amount that’s forgiven won’t be treated as income for federal taxation purposes. The Biden administration has indicated that it will encourage Congress to pass separate student loan forgiveness legislation that includes $10,000 in loan forgiveness in the coming months.
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A Tale Of Two Usps Bills
On Saturday, the US House of Representatives passed legislation that bans recent changes to the US Postal Service and also provides $25 billion in additional funding for the USPS. Though the House came back from its August recess early for the vote, it didn’t include any other provisions from the coronavirus relief package. We still don’t know when one will come, or when you might get your second stimulus check.
The $25 billion in funding for the USPS was originally included in a larger coronavirus stimulus package, but negotiations between House Democrats and Republicans broke down before Congress adjourned on Aug. 7. In a Saturday press conference, House Speaker Nancy Pelosi said she wasn’t in favor of splitting up the coronavirus relief package, but that the USPS situation was “an emergency” and that the bill passed includes additional policy that the House hasn’t issued in its previous proposal over 100 days ago.
The Republican-led Senate “will not pass stand-alone legislation for the Postal Service,” Senate Majority Leader Mitch McConnell .
What Does This Mean For Unemployment Insurance
People currently receiving unemployment benefits will receive an extra $300 per week, half of the original $600 received earlier this year. The extra check would be given until March 14, an extra 11 weeks past the original December 26 expiration date. Self-employed people and gig workers who make use of the Pandemic Unemployment Assistance are also eligible for the additional unemployment payments.
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What Is In The Stimulus Bill: $1400 Checks Expanded Unemployment And Tax Rebates
- Give this article
President Biden signed the American Rescue Plan on March 11, enacting a nearly $1.9 trillion pandemic relief package with benefits including another round of stimulus payments, an extension of unemployment benefits and generous tax breaks to low- and moderate-income people. Weve gone through the bill to help you understand the assistance it offers. We will continue to update this F.A.Q. as pieces of the bill go into effect.
The Child Tax Credit Would Become More Generous Among Other Benefits
For 2021, the bill would temporarily expand the child tax credit, which is currently worth up to $2,000 per child under 17.Under the legislation, the tax credit would be as much as $3,600 for children up to age 5and as much as $3,000 for children 6 to 17.
The bill would make the full value of the credit available to low-income people who are currently ineligible or receive only a portion. And for the second half of this year, it would have the federal government send advance payments of the credit to Americans in periodic installments, akin to a guaranteed income for families with children.
The legislation would also expand the child and dependent care tax credit for 2021, and it would expand the earned-income tax credit for workers without children for this year as well. Through 2025, it would exempt student loan forgiveness from income taxes.
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What Student Loan Changes Are Included In The Stimulus Package
There is a big one for people who already have debt.
You wouldnt have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation for example, if youve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people.
This will be the case for debt forgiven between Jan. 1, 2021, and the end of 2025.
Will This Stimulus Package Be Passed Into Law
Bidens plan is ambitious. But it would have to be negotiated, voted on and passed by both the House and Senate before its passed to his desk to be signed into law. The large price tag of the proposal could receive pushback from conservative Republicans, who largely fought against proposals with similar price tags over the summer.
With control of both chambers of Congress, however, Democrats could utilize budget reconciliation to avoid a Senate filibuster and pass the plan with only Democratic votes, according to The Hill. The Biden administration, however, wants the stimulus package to pass with bipartisan support.
Congress has already passed $4 trillion in legislation to fight against Covid-19 and provide economic aid.
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Occupational Safety And Health Administration
The bill would allocate not less than $100 million for OSHA, of which $10 million is for Susan Harwood training grants and not less than $5 million is for enforcement activities related to COVID-19 at high-risk workplaces, including health care, meat and poultry processing facilities, agricultural work places and correctional facilities.