Economic Stimulus Payment Information

Third Round of Stimulus Payments (American Rescue Bill), March 2021

Overview:

  • $1,400 per adults, children, and adult dependents such as college students and elders.
    – These adult dependents did not qualify for previous payments
     
  • Income limits:
    – Individual filers who earn as much as $75,000 (Phases out at $80,000)
    – Joint filers making $150,000 (Phases out at $160,000)
    – Head of household can earn up to $112,500 (Phases out at $120,000)
     
  • Those who filed 2020 taxes, the amount of the stimulus payment will be based on the person’s 2020 income
    – If person has not filed 2020 taxes, their 2019 taxes will be used to determine income verification
     
  • If person has not received a previous stimulus payment but qualifies to receive it, they need to file a 2020 tax return and check the box “recovery rebate credit” to claim their stimulus payment(s).
     
  • Resource: Third Stimulus Check Calculator: Estimate How Much You’ll Receive

Unemployment Benefits:

  • Federal unemployment assistance is extended through September 6, 2021
    – Those who qualify will receive $300 a week in addition to any state benefits they receive
     
  • Portion of unemployment income will not be taxed by the IRS
    – For individuals the first $10,200 in unemployment benefits are tax-free
      – $150,000 income cap to be eligible
    – For married couples filing jointly who both received unemployment, the tax-free amount goes up to $20,400
      – $150,000 income cap still applies
     
  • If a person has not yet filed their 2020 taxes, the IRS has updated the 1040 to include this tax break
     
  • If a person already filed their 2020 taxes, they will need to complete an amended return to adjust their 2020 taxable income
    – HOWEVER DO NOT FILE AMENDED RETURN JUST YET
      –  The IRS expressly stated that you “should not file an amended return at this time, until the IRS issues additional guidance.”
     
  • Resource: Unemployment Tax Break: Don’t Amend Your 2020 Tax Return Quite Yet to Claim the New Exemption

Child Tax Credit:

  • The bill increases the child tax credit for one year to $3,600 for kids under 6, and $3,000 for kids between 6 and 17 (the current credit is a flat $2,000 per child under 17)
    – 50% of the credit would be available as advance monthly payments that the IRS will start sending to families in July 2021.
     
  • Income limits
    – Single filers phase out begins at $75,000
    – Joint filers phase out begins at $150,000
    – Head of households phase out begins at $112,500
      – Families who earn less than $200,000 ($400,000 for joint filers) could still claim the regular $2,000 credit
     
  • Resource: Families Get a $3,000 Child Tax Credit for 2021

Health Insurance:

  • For those who purchase insurance on the federal health exchange or state marketplace, the income cap on insurance premium tax credits has been removed for two years.
     
  • Amount a person or family will pay for health insurance will be limited to 8.5% of their income as calculated by the exchange.
     
  • Resource: American Rescue Plan and the Marketplace

Food & Housing Assistance:

  • Supplemental Nutrition Assistance Program (SNAP) benefits increase by 15% through Sept. 30, 2021  The current federal eviction and foreclosure moratoriums, which are set to end on March 31, have not been extended.
     
  • The bill does provide additional funding will provide relief to those behind on mortgages, rent, and utility bills.
     
  • To apply for assistance:
    – Fairfax County Residents call Coordinated Services Planning (CSP); 703-222-0880
    – Arlington County Residents call COVID-19 Financial Assistance; 703-228-1300
    – City of Alexandria Residents call Department of Community and Human Services Customer Relations Team; 703-746-5700
    – All others dial 2-1-1 and customer service representative will connect you to your county’s resources

Learn More:

Article from Investopedia summarizing the bill: American Rescue Plan (Biden’s $1.9 Trillion Stimulus Package)

Receiving Your Second Economic Impact Payment
 

Direct payments of $600:

  • Income limits based on 2019 earnings
    • Individuals making up to $75,000 receive full amount, phases out at $87,000
    • Head of household making up to $112,500 receive full amount, phases out at $124,500
    • Married making up to $150,000 receive full amount, phases out at $174,000
    • Qualifying children (under age 17)  $600 per child
  • Phase-out amounts: for every $100 earned over the income limits, a person’s direct payment will decrease by $5
  • At phase-out amount, a person does not qualify to receive a direct payment

Changes from first stimulus payments:

If you did not receive your first stimulus payment, you will most likely not receive the second stimulus payment via direct deposit or check. However, you may still collect the stimulus monies you are entitled to by filing your 2020 Federal tax return and checking the “Recover Rebate Credit” (line 30) box on the 1040.

If you received the first stimulus payment but not the second stimulus payment, check your payment status at: https://www.irs.gov/coronavirus/get-my-payment 

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