The COVID-19 vaccination rollout is charging full steam ahead! And it seems likely that all those who want the vaccine will be vaccinated before summer’s end.
California (along with many other states) is laying off the “lockdown” restrictions and allowing most businesses to reopen (at least in some fashion).
But while these are certainly positive developments, huge swaths of the economy continue to sputter. To address this still financially precarious situation, the new Biden Administration-sponsored stimulus bill was just passed into law by congress.
No doubt, you’ve heard about the additional $1,400 stimulus checks. But what else is in the bill? And how will it impact your finances? Let’s take a closer look…
$1,400 Stimulus Checks
Of course, the promise of ready cash has received the most press in the latest stimulus bill. And toward that end, Congress has authorized a third “stimulus payment” of $1,400, which is the largest installment to date.
But who qualifies and when can you expect the payments?
Just as with the prior stimulus payments, individuals earning $75,000 or less and couples with a combined income under $150,000 qualify for the full $1,400 payments.
Individuals earning less the $80,000 and couples with a combined income under $160,000 can expect slightly smaller payments (graduated based on where you fall on that narrow spectrum). And for individuals and couples with earnings above these caps, no stimulus payments are forthcoming.
For eligible taxpayers who registered for direct deposit transfers during the last round of stimulus finding, you may have already received the payment. And if not, you should see the funds in your account shortly.
Those who opted for physical checks will likely see payments arrive in the mail sometime over the next couple of weeks.
Additional Jobless Benefits
In addition to extending the weekly unemployment benefits for pandemic impacted workers, the Biden Administration also lobbied to raise payments to $400 (up from the current rate of $300 per week). And the House of Representatives agreed with this proposition. But the Senate balked and held the rate at an additional $300 per week.
The bill also waives 2020 income taxes on the first $10,200 of unemployment benefits for households earning less than $150,000. A move that will ease the income tax burden on those still struggling to find new employment.
Child Tax Credit Increase
Currently, parents receive a $2,000 tax credit for each child under 17 years of age residing in their household. The new bill temporarily ups this credit to $3,600 per child ages 5 and under and $3,000 per child for children ages 6 to 17.
The bill also allows for this credit to pre-distributed to qualifying low-income families. This provision essentially amounts to guaranteed income for families with children.
Earned Income Tax Credit Increase
The new bill triples the earned income tax for workers without children (which marks the biggest increase of this credit since 2009).
Also, 19 is now the minimum age to qualify for the credit (reduced from the prior minimum of 24). And the maximum age cap is eliminated.
Wondering How The Latest Stimulus Bill Impacts Your Taxes?
You’re not alone. I’ve been deluged with that this question over the last couple of months. And I can help sort out your situation, too! Get in touch to schedule a FREE consultation!