Additional Benefits in the Economic Aid Package – CBS Sacramento - Market News
Home » Additional Benefits in the Economic Aid Package – CBS Sacramento
Stimulus Check

Additional Benefits in the Economic Aid Package – CBS Sacramento

Additional Benefits in the Economic Aid Package – CBS Sacramento

(CBS Detroit) — The third stimulus check reaches all the people who need it. But President Biden’s $1.9 trillion economic aid package includes much more than a $1,400 payment. The American Rescue Plan Act includes programs that support struggling families, communities and small businesses and fight the spread of COVID through testing, detection and vaccinations. Broadly speaking, it aims to alleviate the economic pain caused by the pandemic. And some of the specific programs can put more money in your pocket as well.

Exactly how much money depends on your financial situation. The programs and the rules around them have changed slightly from the last two incentive packages. When that money comes in depends more on how implementation goes in the coming days, weeks, and even months.

READ MORE: Stimulus Control Update: Economic Impact Payments Are On The Way

This is included in the incentive package.

Third round of stimulus checks

Given last spring’s $1,200 and $600 this winter, a third payment seemed imminent if the economy continued to falter. The $1,400 figure came after former President Trump requested a $2,000 payout instead of the then-pending $600. Democrats quickly backed the larger amount, passing a bill in the House that would override the second stimulus check. triple.

A larger second stimulus check never materialized, but the number stuck. When Democrats Jon Ossoff and Raphael Warnock won their special second round in Georgia, that shifted control of the Senate to their party. the effort gained momentum. Once the Democrats had the presidency and both houses of Congress, they pushed through with a third stimulus.

While $1,400 is the topline number, some people receive less or more depending on their income and dependents.

The previous two stimulus controls have been phased out for individuals with a adjusted gross income (AGI) over $75,000 per year and married couples with an AGI over $150,000. (AGI is the total of a person’s wages, interest, dividends, alimony, retirement benefits and other sources of income minus certain deductions, such as interest on student loans, alimony payments and retirement contributions.) Two stimulus payments fell five percent. So the $1,200 CARES Act payment shrank to $0 for incomes over $99,000 ($198,000), and the second stimulus of $600 shrank to $0 for incomes over $87,000 ($174,000).

In early February, Democratic Senator Joe Manchin and Republican Senator Susan Collins of Maine proposed a change focused on “targeting economic-impact payments on Americans suffering the effects of COVID-19, including provisions to ensure higher-income taxpayers are ineligible.”

The income threshold does not change in the American Rescue Plan Act. But the phase out happens much faster. So while the threshold remains at $75,000 ($150,000), those making $80,000 ($160,000) or more will receive nothing. If the phase-out progresses at a steady pace, that would mean people will receive $0.28 less for every $1 they earn over the cap. Put another way, those with an AGI of $76,000 should receive $1,120, and that total would drop by $280 for every $1,000 addition of income.

Those with older dependents could see more money. A dependent was defined as someone under the age of 17 who last lived in your household. The US bailout law expand the pool of eligible dependents, including those over the age of 16. That group includes students and older adults with certain types of disabilities. This change will make an estimated 13.5 million additional people eligible for incentive payments, with up to $1,400 more per person going to eligible taxpayers. Dependent stimulus payments are added to the taxpayer’s total and phase out at the same pace.

Other help to families

A third aid payment will account for about $422 billion of the roughly $1 trillion intended to help families. But a small part of the remaining money can also end up in your pocket. Family assistance also includes expanded unemployment benefits, a more generous tax credit for children, and more.

The last $300 weekly federal unemployment insurance bonus expired on March 14. The American Rescue Plan Act extends these until Labor Day. Recipients with a household income of less than $150,000 do not have to pay tax on the first $10,200 in unemployment benefits. Those eligible for Pandemic Emergency Unemployment Compensation (PEUC), which covers people who have used up their state benefits, and Pandemic Unemployment Assistance (PUA), which covers freelancers and gig workers, will also see their benefits extended until early September. PEUC expires at 53 weeks. PUA expires at 79 weeks.

Under the revised child tax credit, the Internal Revenue Service (IRS) will pay out $3,600 per year for each child up to five years old and $3,000 per year for each child aged six to 17. Payments are automatically paid out on a periodic basis from July to December 2021, with the remainder being spent when the recipient files their 2021 taxes. (Many expect that “periodic” will actually mean monthly or possibly quarterly, but the IRS has yet to determine that.) The benefit will not depend on the recipient’s current tax burden. In other words, eligible families receive the full amount regardless of how much — or little — they owe in taxes. Payments will gradually begin to disappear above an annual income of $75,000 for individuals and over $150,000 for married couples. The more generous credit will only apply for 2021, although Democrats will likely try to extend it.

READ MORE: Deadline for IRS tax return is postponed to May 17

The tax credit for care for children and dependents also becomes more generous. The value of the credit is now $4,000 for one child or $8,000 for two or more children. At a household AGI of $125,000, those amounts will begin to decline. The credit was previously up to $2,100 and covered no more than about a third of eligible expenses. It started phasing out at an AGI of $15,000.

The American Rescue Plan Act includes other money-saving programs that can benefit large numbers of Americans. The stimulus package provides an additional $27 billion in rental assistance and $10 billion in mortgage assistance. Those who have lost their jobs and resorted to buying health insurance through COBRA will see Uncle Sam pay their premiums from April to the end of September. The cost of health insurance purchased through a government exchange is capped at 8.5 percent of a person’s AGI.

An extension of the Additional Nutritional Utility (SNAP) bonus is also part of the American Rescue Plan Act. The extra 15 percent in SNAP benefits the second stimulus package will also be extended from June to September. The 15 percent bonus provides about $27 more in food aid per person per month, or more than $100 for a family of four.

The rest of the incentive package

The economic aid package includes much more than stimulus measures and other aid to families. The American Rescue Plan Act also includes hundreds of billions of dollars to help communities and small businesses and hundreds of billions more to stop COVID and bolster vaccination efforts.

States and localities hit hard by declines in tax income, with 26 Democrat- and Republican-led states running budget deficits. As most states are required by law to balance their budgets, public sector jobs and services have been cut. In mid-February, about 1.3 million state and local government jobs were lost, mostly in education. A budget deficit may also necessitate an increase in taxes. With the assigned $360 billion, states and local governments can address this important need. This part of the plan also includes $30.5 billion for transit systems, $15 billion for airlines and $10 billion for critical infrastructure. Restaurants, one of the hardest hit industries during the pandemic, will receive $25 billion.

The best way to get the economy back to some degree of normalcy is to minimize the threat people face in resuming their pre-pandemic lives. That requires a comprehensive COVID response. To that end, about $76 billion goes to vaccines and testing. That includes nearly $48 billion to advance national testing and tracing, $15 billion to better distribute and administer vaccines, $6 billion to improve research and development, and $1 billion to raise awareness.

Schools will also receive $128 billion to help reopen, and another $39 billion set aside for colleges and universities. The bill restores the requirement that employers provide paid leave to those who contract COVID and/or are quarantined and makes it easier to purchase individual health insurance.

Why another stimulus package is needed?

The economy shrank by 3.5 percent in 2020, the largest single-year decline since the end of World War II. Weekly unemployment rates remain at an all-time high, with about 770,000 people applying for unemployment insurance for the first time last week. (For reference, a typical pre-pandemic week saw about 250,000 new unemployment claims.) Another 282,000 requested Pandemic Unemployment Assistance.

At the end of February, about 18.2 million people were receiving some form of unemployment benefit. That’s about one in nine employees. While the official unemployment rate is 6.2 percent, the actual percentage is probably closer to 10 percent, considering all the people who have retired from work. on the sunny side, employers added another 379,000 jobs last month.

An economic recovery depends on the widespread spread of a COVID vaccine. And efforts to inoculate the public are advancing. Shortages and winter weather had forced some areas to temporarily close vaccination centers and cut back on vaccine administration. Many who qualified had problems scheduling appointments. Nevertheless, Americans have more than 115 million doses, with 22.7 percent of the population having received at least one dose and 12.3 percent being fully vaccinated. The number of vaccinations continues to rise at the rate of more than two million doses per day.

The Food & Drug Administration recently cleared Johnson & Johnson’s one-time vaccine, with millions of doses already shipped. Biden recently stated that the country enough doses to vaccinate all Americans by May. The actual insertion of needles into the arms will likely take longer. Mask wearing and a general lack of normalcy could continue until 2022 Covid cases 29.5 million, while the death toll approaches 540,000.

MORE NEWS: Tax Credit for Kids: How Extended Credit Works and Why It Means More Money for Parents

Originally published Monday, March 1, at 12:53 PM ET.