$1.9 Trillion American Rescue Plan Signed Into LawPublicado:
What’s Included 3rd Stimulus Bill? $1,400 Stimulus Checks, Extended Unemployment Benefits, and More
President Biden signed a new $1.9 trillion COVID relief package on Thursday afternoon (March 11, 2021). This bill, called the American Rescue Plan, is the third major stimulus package that the federal government has made law.
“This legislation is about giving the backbone of this nation – the essential workers, the working people who built this country, the people who keep this country going – a fighting chance,” President Biden stated.
The first stimulus package was the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (a.k.a. CARES Act) (a.k.a. the CARES Act), which was signed into law by President Trump on March 27, 2020. The second major stimulus bill was the $908 billion COVID-Related Tax Relief Act, which was signed into law by President Trump on December 27, 2020.
The $1.9 trillion American Rescue Plan includes another round of stimulus checks, extended unemployment benefits, expanded tax credits, funding for schools and state/local governments, and much more.
Here’s a breakdown of the most important provisions in this latest stimulus deal:
$1,400 Stimulus Checks
The American Rescue Plan allocated approximately $400 billion for direct payments to individuals, which means that millions of eligible Americans will receive $1,400 stimulus checks. According to the White House Press Secretary, Jen Psaki, these stimulus payments will start going out as soon as this weekend. Those who have Direct Deposit set up with the IRS will receive their stimulus check faster because the money will be sent directly to their bank account. For the remaining eligible population, the IRS will be issuing and mailing paper checks.
To qualify for the full stimulus payment amount of $1,400, an individual’s annual income must be $75,000 or less – for a married couple filing jointly, their combined income must be $150,000 or less. Any individual who earns $80,000 or more (or married couple with annual income of $160,000 or more) will not be eligible for a stimulus check this time. Note that this excludes some people who were eligible for the first two stimulus checks.
This is the third round of COVID-relief stimulus checks that we’ve seen so far. The first round of stimulus checks were authorized by the CARES Act in March 2020 and gave $1,200 to each eligible individual. The second round of stimulus checks were authorized by the COVID-Related Tax Relief Act in December 2020 and provided a $600 payment to each eligible individual.
RELACIONADO: Stimulus Check Update
Extended Unemployment Benefits
The new stimulus package extends the $300 per week unemployment benefit, which was originally authorized by the CARES Act in March 2020 and then extended by the COVID-Related Tax Relief Act. This program was set to expire in mid-March but has now been extended through September 6, 2021.
While many were pushing for unemployment compensation to be increased to $400 per week, that increase was ultimately not included in the final version of the bill.
RELACIONADO: How the CARES Act Impacts Unemployment Benefits
The Child Tax Credit
The American Rescue Plan expands the Crédito Fiscal por Hijos and also extends the credit to low-income families who might not otherwise/normally be eligible to claim it. The Child Tax Credit, as it used to exist, originally provided families with up to $2,000 for each qualifying dependent child (age 16 or younger). This was a partially refundable credit, which means it can result in a tax refund if the amount of your tax credit is more than what you owe the IRS in taxes.
Under the new law, the Child Tax Credit is fully refundable and is worth up to $3,600 for each qualifying child under age 6 and up to $3,000 for each qualifying child between age 6 and 17. It also removes a provision that requires people to earn $2,500 per year in order to claim the tax credit. The new stimulus bill also expands childcare-related tax credits for a year as way to help families cover the costs of childcare.
RELACIONADO: Common Tax Questions & Answers
Money for State & Local Governments
The new Coronavirus relief package allocates $350 billion in funding for states, cities, and other local governments/territories. This federal aid is meant to help invest in local infrastructure and broadband networks.
COVID-19 Testing & Vaccines
There will be $160 billion spent on COVID-19 testing, contact tracing, and vaccine supply and distribution.
The American Rescue Plan designates approximately $130 billion to K-12 schools, for improving health and safety conditions so that they can reopen. Nearly $40 billion will go to colleges and universities. More funds are also allocated for other childcare and education programs, including $1 billion for the Head Start program.
Over $30 billion is designated for housing relief, which includes emergency rental assistance, homeowner/mortgage assistance, and aid for the homeless.
Bailout for Failing Pensions
The stimulus package provides $86 billion for failing pension plans, many of which are going bankrupt. However, this provision has been met with criticism because it is not directly related to the Coronavirus as a public health crisis.
While there are many programs involved in the American Rescue Plan, this stimulus bill does not include a $15 per hour federal minimum wage hike, nor does it include a provision for student loan debt forgiveness.