Timely and Relevant News: Highlights of the New Stimulus Package
The $1.9 trillion-dollar American Rescue Plan Act of 2021 (ARPA) was recently signed into law. This is the latest in a series of COVID-19 related stimulus legislation. This new legislation impacts individuals, businesses, states and local governments.
A primary catalyst for this new round of relief was the expiration of some federal unemployment benefits on March 14, 2021. The ARPA expands and continues Covid-19 related unemployment benefits as a major part of the legislation.
Here’s a quick recap of several highlights from the ARPA:
Stimulus Checks:
The new law authorized another round of stimulus checks of $1,400 ($2,800 for joint filers) for qualifying individuals and $1,400 for each qualifying dependent.
The phase-out range for the stimulus checks will affect those earning more than $75,000 annually and capped for those earning $80,000 or more ($150,00-$160,000 for married couples).
Unemployment Benefits:
The ARPA waives federal tax on up to $10,200 of unemployment benefits for single adults who earned less than $150,000 a year in 2020. The ceiling is $20,400 for two workers in a married couple. Amounts over $10,200 are still taxable. States may also decide not offer the tax break.
Child Tax Credit:
The ARPA increased the Child Tax Credit maximum amount to $3,000 per child and $3,600 for children under age 6 and temporarily increased the value of the Dependent Care Tax Credit up to $3,000 for one dependent and $6,000 for two or more dependents.
Paycheck Protection Program (PPP)
The new legislation allocates an additional $7.25 billion towards PPP funding.
The ARPA also includes additional eligible non-profit entities for first or second draw PPP loans. The Small Business Administration (SBA) is only offering PPP loans until March 31, 2021.
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Disclosure:
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.