The American Rescue Plan: Not Just for Kittens this time

  • The third stimulus payment is going out, possibly as soon as the end of the month. For those individuals who make/declare less than $75,000 a year or couples who make less than $150,000, everyone should receive either a direct deposit or a check. The “Get My Payment” portal is temporarily closed as the IRS reviews the details of the newest bill, but keep checking back for information if you did not receive the first or second payment, or received less than you were expecting.
  • Student loan debt hasn’t been forgiven and Democrats are still negotiating this approach, but they declared that it will *NOT* be taxed when it happens. One of the big questions was whether or not receiving $10,000 (for example) in loan forgiveness would be taxed as if you received $10,000 that year. The American Rescue Plan passed a provision that loan forgiveness received through 2027 will not be considered part of your taxable income when that goes through. (From Forbes, Six Take-Aways for Student Loan Borrowers)
  • Federal loan payments are still not being required until September 30, 2021.
  • For folks who file taxes on their income, the Child Tax credit was increased from $2,000 per child to $3,000 per child ($3,600 for a child under age 6) and makes 17-year-olds qualifying children for the year. Also, families will get back as a refundable tax credit as much as half of their spending on child care for children under age 13, so that they can receive a total of up to $4,000 for one child or $8,000 for two or more children. If you have kids and have been using this in your taxes, this means that in the second half of this year, expect a check. (Read more in this article from SmartAsset.com on the Child Tax Credit and estimate how much you might receive.)
  • The bill creates block grants (Federal money passed to each states in one single chunk, which then allows states work out the details for how it gets to you — similar to unemployment money where you apply through your state) to pay for childcare costs, as well as an emergency fund for childcare providers to pay for a range of costs that come with their work. This is the single biggest investment in childcare since World War II.
  • For anyone receiving Temporary Assistance to Needy Families (TANF), the bill provides an additional $1 billion for states to cover the additional cash assistance in response to needs created by the crisis.
  • The plan extends current unemployment insurance (UI) benefits and eligibility to September 6 and provides a $300 per week supplement. Also, the first $10,200 you receive in 2020 is tax-free. Last year UI was expanded to cover people in non-formal industries. Programs are administered by the state, so that’s where to look to see if you qualify (Federal page with state links)
  • Over $20 billion was earmarked for rental assistance through 2027, including emergency housing vouchers. These programs started last year, but have hit major snags because of a lack of Federal guidance, and then guidance which included some potential huge barriers to applicants. Your state/city will have more information on what those programs look like, and a number of cities have already begun opening application windows. There was additional funding allocated for housing vouchers for survivors of violence, including trafficking, but that funding will be moved through service providers.
  • For folks on SNAP, there was a temporary increase which averages out to be about $25 per person/per month. This will now continue through September of 2021. There is also an investment to increase the value of WIC, but I haven’t seen a clear number on how much that will mean per person yet. SNAP and WIC are food assistance — SNAP is general and WIC is for parents. If you want to see if you qualify, this is the Federal page which will direct you to state pages.
  • Your insurance premium might go down! The Plan is going to cap the cost of your plan at 8.5% of your income and remove caps on getting tax credits for the next two years. If you don’t have health insurance but want to check out if it’s an option now, go to your state’s marketplace — enrollment is open through May 15 this year because of the pandemic.
  • For those who lost their job and their workplace-based healthcare, COBRA is going to be subsidized 100% until September. (For more information on COBRA)

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