Coronavirus Relief Bill: What you need to know.
On March 6, the Senate passed the $1.9 trillion American Rescue Plan. The coronavirus relief bill now goes back to the House of Representatives, which must approve the Senate’s changes, before the president can sign it into law. The bill promises further financial relief and assistance to millions of Americans who may still be struggling with the financial devastation of COVID-19.
Below, we’ve outlined some of the most significant measures included in the American Rescue Plan.
The third round of stimulus checks is set at $1,400. Here’s who is getting checks:
- Single taxpayers with an adjusted gross income (AGI) of $75,000 or below.
- Taxpayers filing as heads of household with AGIs of $112,500 or below.
- Married couples filing jointly with AGIs of $150,000 or below.
Parents will also be getting checks for every child they claim as a dependent on their tax return, including college students and adult children with disabilities.
Older relatives who are living with taxpayers will also be counted as dependents.
Higher earners will receive partial payments, but these will phase out quickly. For single filers, the checks stop at an AGI of $80,000. For heads of household, the checks stop at AGIs of $120,000, and for joint filers, the cutoff is $160,000.
To be eligible for a payment, an individual must have a Social Security number.
Changes to unemployment insurance
The relief bill will extend unemployment benefits for another 25 weeks, until Sept. 6. The weekly supplemental benefit of $300 will continue running through that date, too.
The first $10,200 of benefits will be tax-free for people whose income is less than $150,000. This only applies to unemployment paid in 2020.
In addition, unemployment benefits received through the Pandemic Unemployment Assistance program will run through Sept. 6. Benefits received through the Pandemic Emergency Unemployment Compensation program would also run through that date.
Changes to the child tax credit
The relief bill will expand the child tax credit to $3,000 for children ages 6 through 17, and to $3,600 for children ages 5 and under. The credit will now also be fully refundable.
In addition, half the child tax credit may be advanced to parents before the end of 2021. Plans for the distribution are still being finalized, but lawmakers are hopeful that parents will start getting monthly payments toward their child’s tax credits for 2021 as early as July.
Married couples with a modified AGI of up to $150,000 (or up to $112,500 for heads of household and up to $75,000 for single filers) would receive the full value of the new benefit.
The bill can provide billions of dollars in rental and utility assistance to people who are struggling with their housing costs and are at risk of eviction from their homes.
Approximately $27 billion would go toward emergency rental assistance. The majority of these funds will replenish the Coronavirus Relief Fund. In addition, the bill would provide nearly $10 billion to help homeowners who are struggling with mortgage payments, utility bills, and other housing costs. Approximately $100 million is dedicated to housing counseling and another $5 billion designated to help the homeless.
Changes to student loans
There will be no income tax on forgiven debt for those that qualify for loan forgiveness or cancellation. This would apply to all debt forgiven between Jan. 1, 2021, and Dec. 31, 2025.
The most recent coronavirus relief bill is both ambitious and comprehensive. With these guidelines, you can learn all about the American Rescue Plan and better know what to expect going forward. If you need assistance until the bill is passed, we offer a support loan to Elevate Credit Union Members.