The new stimulus package provides much needed Covid-19 relief for families and businesses affected financially by the pandemic. How will you benefit from the latest round of Covid relief aid? Do you qualify for a $1,400 direct check? Read on to find out.
- The $1.9 trillion stimulus package will not hike the minimum wage.
- Those eligible will receive $1,400 direct stimulus checks.
- The relief package also includes an expanded child tax credit and an income tax credit.
- The unemployed will receive $300 weekly federal unemployment payments.
The package provides much-needed COVID-19 relief for families, businesses, schools, local governments, and vaccine distribution centers all over the nation.
How will you benefit from the upcoming round of pandemic relief aid? Do you qualify for a $1,400 direct check? Read on to find out.
Minimum Wage Hike Will Not Happen
The Senate excluded from the relief package a provision to increase the federal minimum wage. That provision was dropped so that the bill could pass under budget reconciliation, a fast-track process for consideration of bills in which a bill can be passed with a simple majority in the Senate.
$1,400 Direct Stimulus Checks – Are You Eligible?
The stimulus package is structured to send $1,400 checks to Americans who have already received $600 during the previous stimulus round. Eligibility mirrors the eligibility requirements of the $600 checks.
More precisely, those qualifying are individuals earning less than $75,000 and married couples making less than $150,000 per year. It is estimated that stimulus checks will be sent out to 90% of U.S. households.
As part of its state-level efforts to fight the economic impact of the pandemic, California has devised its own COVID-10 relief package. It will hand out $600 stimulus checks and aid for small businesses, community college students, food banks, and agricultural workers.
Your Tax Return and Stimulus Check Eligibility
The Government will determine your eligibility for the third round of direct stimulus payments through the tax return you may have already filed.
The deciding factor will be your Adjusted Gross Income (AGI), or your gross income with adjustments to income deducted.
Your gross income is the money you earn throughout the year. From this sum, you can deduct various expenses such as those you incur through retirement account contributions, student loan interest, alimony payments, etc.
The IRS has published a step-by-step guide on how you can determine your AGI.
The Stimulus Package and Tax Savings
The $1.9 trillion pandemic aid package could save an American household taxes totaling $3,100 in 2021. The savings would originate from several provisions of the bill, such as:
- The $1,400 direct stimulus check, which is non-taxable, thus amounting to an advance tax credit
- An increased income tax credit
- A higher child tax credit
- Further tax deductions for those incurring child-care expenses
While most of these savings will benefit lower-income households per the eligibility requirements, some may boost the savings of higher-income families.
The $3,600/$3,000 Child Tax Credit
American families could save $3,600 in taxes in the 2021 fiscal year, through the enhanced child credit provision of the pandemic recovery package. The legislation addresses the issue from two angles.
- It expands the amount of the credit, including previously not eligible families.
- It raises the age of qualifying dependents to 17.
Half of the Child Tax Credit benefits will land in the pockets of beneficiaries through monthly direct payments. Children under 18 are entitled to $250 payments, while children under 6 are eligible for $300 payments. The Treasury will begin these payments on July 1, 2021.
Families can claim the remaining half of the tax credit through their 2022 tax filings for 2021. Qualifying households can choose to claim the entirety of the tax credit through their 2022 tax filings.
$300 Weekly Federal Unemployment Benefits
If you are unemployed, you will probably not be happy that the US Senate has reduced the $400 weekly federal unemployment benefits in the President’s stimulus bill to $300. On the positive side, unemployment benefits are extended through early September, and the bill does include a provision that waives federal income tax on the first $10,200 of benefits received in 2020.
Get Debt Relief Now
If you need debt relief, or you are struggling to make credit card payments, the stimulus package could help you make a small amount of headway. But, if you really want to put a ding in your debt, contact a ClearOne Certified Debt Specialist 866-481-1597 to determine your best debt relief options and to get a free savings estimate.