There has now been around $6 trillion in economic relief during the pandemic thus far. Yes, $6 trillion. That number includes the recently passed American Rescue Plan Act (ARP) which account for $1.9 trillion.
Our goal here is to breakdown the important pieces of the Act that you need to know about.
American Rescue Plan Act – Stimulus Payments
More stimulus payments are coming for some Americans!
- Single: $1,400
- Married: $2,800
- Each Dependent: $1,400
- Phase Outs:
- Start to phase out at $75k for Single and $150k for Married
- Completely phase out at $80k for Single and $160k for Married
- Note: This will be calculated based on your most recent tax return on file.
American Rescue Plan Act – Unemployment Benefits
More news for those on unemployment and those who received unemployment!
- Federal Supplement: Will remain at current level of $300 a week for weeks beginning after March 14, 2021 and before September 6, 2021.
- Unemployment Benefits Taxability: First $10,200 of unemployment benefits received in 2020 will be exempt from income taxes. This is a retroactive change and only applies to individuals with income below $150k.
- If you already filed your return, you will be able to file an amendment and if you have not filed yet, wait for your tax preparer’s software to be updated.
American Rescue Plan Act – Child Tax Credit
Have Kids? The Child Tax Credit has been expanded for tax year 2021!
- Under 6 Years Old: $3,600
- Ages 6-17: $3,000
- Note: Starts to phase out for those with income over $150k (Married) or $75k (Single)
- For July 20201 through December 2021 they will be making advance tax payments of $300 per Month (Under 6 years old) or $250 per Month (Ages 6-17).
American Rescue Plan Act – Other Items To Note
Here are a few other key items that we noted.
- Establishes the Restaurant Revitalization Fund which will be administered by the SBA. This program will allow eligible entities access to grants.
- Additional Funding to the PPP 2.0 Program – Note the 3/31/21 Deadline has NOT been extended via this bill.
- No student loan forgiveness items were included however the government may be laying the groundwork as they put in this bill that any student loan forgiveness passed between 12/30/20 thru 1/1/26 will be tax free.
- and so much more but this is what we found to be the most relevant to our audience.
As always we will continue to keep you up to date as more details emerge and as potentially more relief packages and worked on here in 2021.
If you don’t have an accounting or tax advisor (or you need assistance with anything discussed), click here to book your complimentary strategy session with JETRO.