A new $1.9 trillion U.S. Epidemic relief bill was finally passed amid a pandemic of the Chinese Communist virus (Wuhan pneumonia).
The bill, called the American Rescue Plan, includes a $1,400 bailout check for many Americans; extends unemployment benefits of $300 a week until Sept. 6; and extends the child tax credit and a generous one-year extension of the child tax credit.
This round of economic relief payments differs slightly from the previous two rounds in that it places more restrictions on beneficiary eligibility. Meanwhile, tax season is upon us, so you can learn more about relief checks, tax filing and deadlines in this article.
Can You Receive Relief Payments
Under the bill, individuals with adjusted gross income (AGI) of $75,000 or less and couples with AGI of $150,000 or less will be eligible for a $1,400 lump sum payment.
As in previous rounds, Americans with incomes above the starting line will still receive a portion of the relief payment. The amount tapers off as income increases. However, individuals with annual incomes of $80,000 or more and couples with annual incomes of $160,000 or more are excluded, as they are not eligible for this bailout. For those who are heads of households, the income band for the relief is $112,500 to $120,000.
For more information on how to determine if you and your Family are eligible for this round of relief, please refer to the previous article: Calculate if you are eligible for the $1,400 relief.
When your money will arrive
White House Press Secretary Jen Psaki said last Thursday (March 11) that some Americans could see relief money in their bank accounts as early as this past weekend. However, the speed of bailout payments depends on several factors, including the Internal Revenue Service (IRS).
Your 2020 tax bill is a key factor in determining this round of bailout payments.
If a taxpayer has not filed a 2020 tax return as of Thursday, the IRS will likely rely on their 2019 tax return to calculate the amount of relief that person should receive. For those Americans who got into financial trouble last year (2020), this could result in a reduction in the amount of the check you could receive because you earned less money than you did in pre-popular 2019.
The IRS said last week that it has officially completed all first and second rounds of economic relief payments and that all attention will turn to the current tax season.
If you haven’t received your last round of $600 relief checks, chances are they are still in the mail, but in the meantime you should have your tax returns ready to file.
Those who did not receive the first or second round of economic relief, or the correct amount of relief, will need to file a 2020 tax return and claim the Recovery Rebate Credit. This also applies to individuals who are not normally required to file a tax return.
The fastest way to receive the money you owe is to file your tax return and use direct deposit as soon as possible. Please note that any errors on your tax return may cause this process to be delayed.
For more information on how to use your tax return to get your relief money back, please refer to the previous article: Why You Need to Know the Correct Amount of Your Relief Check When It’s Tax Season in the U.S.
Outstanding Debt? –Debt collectors get the green light
The first two rounds of the epidemic relief bill both provided that bailout money could not be garnished by creditors and used to offset debts. But in the new round of bailout bills, the money may be at risk of being garnished for some people who owe unpaid debts.
The bill provides that creditors can garnish the third round of cash payments. That’s because congressional Democrats passed the legislation using a “budget reconciliation” process to circumvent Senate Republicans’ “filibuster.
Child Tax Credit (Tax Refund)
The new bailout bill extends the child tax credit for one year, and experts are calling it “generous.
In 2021, the maximum rebate eligible Parents can receive for each eligible dependent child is $3,000 per year, or $250 per month, for each child between the ages of 6 and 17, and $3,600 per year, or $300 per month, for each child under the age of 6.
The bill requires that half of the credit be awarded to the family in the current year, with the other half to be claimed on next year’s (2022) spring tax return.
The bill also increases the Child and Dependent Care Tax Credit to a maximum of $4,000 (for qualified expenses) for one child and $8,000 for two or more children. To be eligible, your child must be under age 13 and pay for child care.
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