What you need to know about the new stimulus bill
On March 6, the Senate passed the $1.9 trillion American Rescue Plan then on March 10th, the House of Representatives approved the final version and President Biden signed the next day. 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 bill:
Stimulus payments
The third round of stimulus checks are 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 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.
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.
