The Third Stimulus of the Coronaconomy has Arrived.
It’s official! On March 11th President Biden signed off on the final passage of the American Rescue Plan Act, a $1.9 trillion COVID relief package that includes payments that will go directly to American families.
You, and the majority of Americans, will in fact see a third round of stimulus checks coming your way very soon, and many families have already started seeing those payments arrive in their bank accounts. I expect most will be delivered by month’s end.
The latest COVID stimulus package provides a $1400 direct payment, continues with the added unemployment pay, expands access to vaccinations and healthcare, offers additional financial support for low-income families and families with children, provides some relief for small businesses, and much more. Here’s what you need to know:
What’s New and Different for Families
The income threshold for who is eligible has changed. Individuals who earn up to $75,000, and couples earning $150,000, plus their children, qualify for the full $1400 per person. An average family of 4 could receive up to $5600. Single parents with at least one dependent can get the full amount earning $112,500 or less.
The weekly unemployment enhancement payout has changed. Instead of the additional $600 weekly boost, jobless individuals can expect a $300 weekly unemployment benefit through Labor Day, September 6th.
However, this third stimulus package takes unemployment a step further. Mixed earners, workers with both W-2 and 1099 income, will get an extra $100 weekly benefit.
A new unemployment tax provision has been added. Taxes will be waived on the first $10,200 of unemployment benefits for those individuals who made less than $150,000 in 2020.
The $15 federal minimum wage increase didn’t happen. Although initially added to the Covid relief bill this did not pass the Senate and was removed from the current American Rescue Plan.
The Child Tax Credit is fully refundable for this year. Families eligible for the Child Tax Credit will see an increase to $3,000 for children ages 6 to 17, and $3600 for a child under the age of 6. Eligible families can begin getting monthly payments of $300 starting in July, through the end of the year.
Adult dependents are eligible this time. The previous two stimulus payouts missed a group of adult dependents. This third stimulus expanded eligibility to adult dependents, including college students, disabled adults, and elderly relatives. Each dependent qualifies for the full $1400 amount.
Mixed-status households are still eligible. This stimulus plan maintains eligibility for those households with family members that have different citizenship or immigration statuses. Qualifying couples can get a maximum payment of $2800 but those with only one valid identification number will get one $1400 payment. Non-resident aliens are not eligible.
Student loan payments have been paused. Although student loan forgiveness isn’t part of the stimulus plan, student loan forbearance has been extended through September. You can hold off on those payments for now.
More Financial Benefits Available from the Third Stimulus:
- Seniors with low-income can benefit from the $3.7 billion set aside for the Commodity Supplemental Food Program and the $1.4 bill for the Older Americans Act
- Low-income families can get assistance with heating and cooling bills from the $4.5 billion set aside in the Low-Income Home Energy Assistance Program
- Another $25 billion was put in place to provide rental and mortgage assistance and to address other housing issues.
- The bill provides $39 billion to child care providers which can be used to help struggling families.
- Food stamp recipients will continue to benefit from a 15% increase in benefits through September, instead of it expiring at the end of June as originally planned.
The Treasury has already started distributing this third round of stimulus checks. They are using 2019 and 2020 tax returns to calculate how much you are eligible for. Congress did approve the limits based on adjusted gross income (AGI). AGI is your income minus deductions for things like health savings accounts, IRA contributions, student loan interest, etc.
The IRS is in the middle of its tax-filing season and it’s unknown if that will affect how quickly they can turn out all the stimulus payments.
How to Make Sure You Get Your Payment:
If your income fell in the 2020 tax year or the size of your family increased in 2020, you’ll want to go ahead and file your 2020 taxes to ensure you get the max payment. The IRS will use 2019 or 2020 tax returns to determine eligibility, and the threshold was lowered in this third Covid package.
If you haven’t received your first or second stimulus payout and are eligible, you’ll get an opportunity to include that when you file your 2020 taxes.
If you received your first and second stimulus payment and meet the new income threshold of $75,000 or less for individuals and $150,000 or less for couples on your latest tax return, you should automatically get your stimulus payment.
When Can You Expect Your Stimulus Payment?
The IRS are making payouts via direct deposit now and will continue to go out through April. Paper check and prepaid debit cards will take longer to process via mail and may be delayed. Those on social security or disability will receive their stimulus payments via direct deposit.
You can check the status of your stimulus payments on the IRS’s portal: Get My Payment https://www.irs.gov/coronavirus/get-my-payment
The American Rescue plan also includes additional funding for schools and vaccine distribution, expanded healthcare, funding for childcare and other programs. It’s important to follow the latest updates so you can take advantage of all the aid you qualify for.
You can find other federal relief programs and information here at the benefits help center: https://www.benefits.gov/help/faq/Coronavirus-resources
Update!!! 2021 Individual Federal tax filing has since been extended to May 17th.