With the anniversary of the COVID-19 pandemic just having passed on March 11th, the recent stimulus package has caught public attention.
What's in the COVID-19 Stimulus Package?
On Thursday, March 12, President Biden signed the American Rescue Plan Act of 2021 into law. This package provides a series of financial assistance to restaurants, schools, healthcare centers, homeowners, and several other areas in need. Among the various categories, the third round of stimulus checks has caught public attention, with the anniversary of the COVID-19 pandemic just having passed on March 11. This Act contains the most extensive aid package since March 2020, with a funding of $410 billion.
The American Rescue Plan Act specifies that a taxpayer's annual income determines eligibility for a stimulus check. Single taxpayers making less than $75,000 and married couples making less than $150,000 will receive a $1,400 check per person. This includes children, families with mixed citizenship status (at least one family member must have a Social Security number), and adult dependents who previously were not eligible for the stimulus check. The federal unemployment weekly checks of $300 set to expire on March 14th were extended until September 6th. The new package also provides tax relief by exempting up to $10,200 in 2020's unemployment payments. The last area of interest is the child tax credit for 2021. This legislation expands the current child tax credit that allows families to claim up to $2,000 on their tax returns for children under 17 years of age. The Act allows families to claim up to $3,600 for children under six and up to $3,000 for children between the ages of 6 and 17 for 2021. This credit is also fully refundable and applies to families that do not make over $2,500 compared to the previous provision. The refund can also be distributed monthly instead of in a singular large payment.
The third round of the stimulus check will be based on a taxpayer's most recent processed tax return from either 2020 or 2019. Anyone who registered online at IRS.gov using the agency's Non-Filers tool last year or submitted a special simplified tax return to the IRS will also be eligible in this round. The IRS will follow the same procedure as the first two Economic Impact Payments and automatically send the stimulus check to people who have not filed a return but receive Social Security retirement or other federal benefits.
Before checking your bank account, it is essential to note that the first batch of the stimulus check will be distributed through direct deposit. While the earliest you could receive the check was March 12, stimulus checks will officially be sent starting March 17. After that, payments will be sent by both direct deposit and through mail as either a check or debit card. The IRS has a deadline of December 31, 2021, to finish sending the stimulus checks.
The IRS advises checking when and how your 2021 Economic Impact Payment will be sent with the Get My Payment tool. This system will update once per day and notify individuals whether their payment has been processed and how they will receive it. Suppose you did not receive the complete first and/or second payment. In that case, the IRS recommends claiming the 2020 Recovery Rebate credit in your 2020 tax return regardless of whether you typically file taxes.
There is more to learn about the American Rescue Plan Act of 2021 and the specific funding it provides. The IRS will provide further information and updates on the progress of the third wave of stimulus checks.