The American Rescue Plan Act of 2021 (Covid Relief Bill) is now the law of the land. President Biden signed the bill into law on Thursday, March 11, 2021. The United States House of Representatives passed the bill after the Senate made changes to the original bill. Congress passed The American Rescue Plan Act of 2021 utlizing a process called reconciliation. As a result, the law passed with only a simple majority and could not be fillabustered. Notably, the Senate passed this major piece of legislation along party lines. Democrats voted 50 in favor. Republicans voted 49 against. One Republican was absent.
The financial markets seem to be voicing their approval. The Dow, S&P 500, and Nasdaq have been approaching all time highs in recent days. However, with financial and real estate markets surging, some economists have warned of the potential for inflation. Others are less concerned and believe a little inflation is just was the economy needs.
Federal unemployment benefits will be $300 per week and extend through September 6, 2021. Therefore, if your household income is under $150,000, the first $10,200 in benefit payments will be nontaxable. If you're married filing jointly the first $20,400 would be exempt from federal income tax. It's important to note that this federal unemployment payment is in addition to state benefits.
Cash Payments To Individuals And Families
Direct payments are on the way. Individuals will receive $1,400 from the IRS. The income limit for individual filers is $75,000 and $150,000 for those married and filing jointly. In addition, for each dependent claimed on your taxes, there is another $1,400.
Child Tax Credit
The American Rescue Plan Act of 2021 also expands the child tax credit. For example, the credit increased temporarily to $3,000 for children age 6 through 17. For those under 6, the amount is $3,600. The amount is reduced for those beyond the income threshholds of $75,000 for individuals and $150,000 for married filing jointly.
Paycheck Protection Program (PPP)
This law continues and expands upon a program from The CARES Act (Coronavirus Stimulus Plan) which was passed last year. However, this bill provides additional funds and allows more types of employers to apply. This program allows employers effected by the pandemic to continue paying their employees while business is shut down or otherwise significantly reduced.
American Rescue Plan Act of 2021
Of course, there is significantly more included in this new law. In addition to addressing the economic crisis, it also serves to tackle the broader health crisis. Click here for a more detailed look at the The American Rescue Plan Act of 2021.
Do you have questions the Covid Relief Bill?