The House and Senate have now passed a whopping $1.9 trillion in Coronavirus stimulus benefits. The bill will now be sent to President Biden for his signature, which is expected in the coming days.
Here are some of the things that it will do:
- Stimulus checks of $1,400 per adult and per child.
- This will set the government back some $400 billion. The checks will be quickly phased out for single filers making more than $75,000 and married filers making more than $150,000 AGI. That amount is phased out at a rate of 1% of the stimulus per $100 of excess income until a single filer makes $80,000 or a married couple without children makes $160,000, at which point it is completely phased out.
- All dependents, even adult dependents such as college students or elderly parents, are eligible for a check this time around!
- Payments will be based on your most recent tax filings, either 2019 or 2020. Don’t forget that if your income drops on your 2020 tax return, or if you have a child in 2021, you can still claim additional funds on your 2021 tax return! If your income goes up then you won’t have to pay this back.
- Child refundable tax credit of $3,000-$3,600 per child.
- Children under age 6 will be eligible for a $3,600 refundable tax credit and other children under 18 are eligible for a refundable $3,000 tax credit. That’s up from $2,000 per child under 17. Payments can be made monthly rather than all of it in a lump sum, starting on 7/1. Newborn children will be eligible for monthly payments as soon as they’re born.
- Child tax credits will be phased out for single filers making more than $75,000 and married filers making more than $150,000 AGI. That amount is phased out at a rate of $50 per $1,000 of income. If your income goes up in 2021 and you exceed that AGI, a safe harbor provision means you won’t need to repay the monthly payments received.
- Dependent care refundable credit of $4,000 for one child or $8,000 for 2 or more children, up to 50% of the expenses needed to work or find work for household AGI up to $125,000. That gets phased down to 20% of the expenses for household AGI up to $400,000.
- Unemployment benefits of $300 per week continue through September 6, costing the treasury some $246 billion. Additionally, the first $10,200 per worker in unemployment benefits won’t be taxable and won’t count towards AGI for households making less than $150,000. These will not only cover regular employees, but also gig economy and other self-employed workers who lose work due to coronavirus.
- Student loans that are forgiven between 12/31/20-1/1/26 will not be taxable.
- Earned Income Tax Credits for childless workers will nearly triple to $1,502. The minimum age will also be lowered to 19 and the maximum age cap will be removed.
- Food stamps will be increased by 15% and extended through September. WIC will also have increased benefits. Pandemic EBT also continues through the summer.
- Health insurance subsidies will be available through September.
- EIDL grants for an emergency grant for small businesses will be funded with $15 billion for grants up to $5,000.
- Bars and restaurants will be able to apply for grants up to $10 million based on losses in 2020 compared to 2019 income.
- PPP will be funded with another $7 billion.
- Employee Retention Tax Credit is extended through December.
- State and local governments will get $360 billion of new funding.
- K-12 schools will receive $130 billion in funding to help get back to classroom learning. Private school will receive $2.5 billion in funding as well. Colleges will get $40 billion.
- $30 billion in housing aid will be sent to governments to help low income households pay rent, mortgages, and tackle homelessness. The eviction and foreclosure moratorium will be extended through September.
- Vaccines and testing will be funded with over $60 billion and COVID disaster relief will get another $47 billion.
Which of these items will you benefit from? What do you think of this bill and the new benefits?
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89 Comments On "Congress Has Just Passed Another Coronavirus Stimulus Bill, Here Is What You Need To Know!"
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Great can use the Stimulus checks for pasach shopping
Biden’s Kimcha D’Pischa
The bill is a POS from a POS and the liberal left !!
How about the $1200 and $600 checks last year?
Foolish to compare
It’s the rest of the bill that comes with it that the comment is calling a POS
And the rest of those other bills too, I presume
Great. Give me your check.
If you get $, return it to the govt.
Which of the points Dan listed above do you think are a POS exactly?
State and Local Governments, Student Loans (FTR I have one, which I anticipate will be forgiven, yet I still think it’s garbage.) among others…
Even the unemployment one can argue to be garbage. It only incentivizes people to not go back to work.
Never heard of this, can someone explain and how do I take advantage of this
I think it should have been significantly smaller and focused on actual covid impacts. It also seems silly for a family of 5 making $150k/yr with no negative covid impacts will get $7,000 plus the additional child tax credits. How can inflation not run rampant??
It already is.
Don’t know about you but the cost on groceries and gas have been rising the last year.
A lot that has to do with supply issues though. Shutdowns of plants, slowing transportation, less air shipping etc. I’m sure inflation might play a role but it’s not the biggest factor
$150k a year isn’t that much for a family in some places of the country, just depends where you live.
What’s really crazy is that the same family with $160k of income gets absolutely nothing, zero, instead of $7k. Combine that with the child tax credit and dependent care credit, and your effective tax rate is well over 100% if in that range. If you got unemployment in 2020, it could be 130%. That is what is absolute madness. Why they didn’t have a normal phaseout rate like the first 2 stimulus payments is beyond me. There isnt anything magical about $75k/$150k as wealth numbers that it should fall off a cliff right at that point. A lot of people are going to try to avoid that last bit of income this year, with sometimes bad consequences. The cap the House passed of $100k/$200k was still a lot steeper than the last 2 payments, but only for people with kids and it is the kids payments that went way up to cause the issue, so that would have been manageable. The Senate reducing it even more to $60k/$100k was just bonkers, its amazing they cared so much about the people in that range. Its not like anybody would have noticed or cared that much or will reward Manchin for doing it, he just decided that at income level you are rich and dont need anything, and he didnt like it. Fascinating stuff.
Same prob with making 15 Buck min. wage. 15 Bucks is nothing in Manhattan but overkill in rural Montana…
why should a family making $149K/year get $7000 in tax payer money partially paid by the family who makes $150k, who also gets nothing
Finally, I’m eligible for a check! 🙂
Eli5: what does a ‘refundable credit’ mean?
Refundable means you can get money back. As opposed to a non-refundable credit which can only deduct how much you owe the government. Example: you owe(/payed) 3k in taxes and have 4k in various credits. If they’re refundable you make 1k profit. If its not refundable you just don’t pay the 3k you owe.
That even if you dont pay taxes (or not enough taxes) to be offset by the credit you will still get a check for the credit amount, aka a “refund”
Question on $10,200 for unemployment deductible.
If my AGI for filing jointly is $160,000, but after the $10,200 deduction , would that be considered under 150k to be eligible for the tax deduction? and maybe stimulus?
Also are couples getting 10,200 X 2 even if only one filed unemployment?
I’m also wondering how AGI is calculated for the purpose of counting the income- it seems circular. Does the income itself I also dont see anything about a phaseout of that benefit. So, if your AGI is $150,001 you can’t deduct anything, but at $150,000 you get the entire $10,200 deduction?? That’s completely nuts and devoid of logic, and nothing in tax law has ever been treated that way.
???
I dont understand why they couldnt just make the stimulus package for nine hundred seventy eight TRILLION dollars and just give every us citizen a BILLION dollars.
Boom. Problem solved…
That is the goal. Just ask AOC
That’s what I’m talking about!!
Per month please
And you’ll carry a suitcase full of $$$ every time you’d like to purchase a bottle of milk
Right now it’s just gonna be a personal item’s worth of $$
its an open grab bag, lets grab is what a sentor said after 9/11 defense spending seems the same here.
the first $10,200 per worker in unemployment benefits won’t be taxable: Is this just for unemployment earned in 2021 or also unemployment earned in 2020 ?
in this bill its only for 2020
What’s the limit for head of household filers ?
Full payment up to $112,500 AGI, phased out to zero at $120,000
Thanks for the succinct summary Dan!
Absolute insanity.
The way I look at it as a small business owner is that I’ll have to pay back the money I get via taxes and inflation not only for myself but also for all of the people that don’t work and pay taxes. I’m not one to turn down free money, but this money is anything but free.
While this isn’t targeted, it is most definitely needed to stimulate the economy and protect those most vulnerable. In any omnibus bill there will be things to love and hate, overall this bill is a shot in the arm of an economy that is leaving tens of millions behind. Way to go Biden and Democrats! (Since 0 Republicans voted for the bill, all the credit goes to the democratic party and not to congress in general).
Money DOES grow on trees !! Look this is insane. But Il take the money sure
Anyone have any more details with the Dependent care refundable credit? What acre is eligible ect?
Camp, child care under grade school, pre-school, babysitters, etc.
“Camp” has always only been DAYCAMP (up to age 13) not sleepaway/overnight camp. IDK about in this bill but I haven’t seen any indication that changed.
“Student loans that are forgiven between 12/31/20-1/1/26 will not be taxable.”
This just means that if Biden were to cancel loans it won’t be taxable but as of now, nothing has been cancelled, correct?
Correct.
Minus the fact that Biden (or any president) doesnt have the legal authority to “cancel loans” – its all a talking point.
Congress would have to allocate funds to pay back these loans, they could have added it to this bill but didnt.
I think it also includes loans that are forgiven through the regular ways- like 10 year non-profit work etc
Probably gonna use my check to buy more GME
Then you need to call it a stimmy
How will the child tax credits work exactly can someone explain in more detail? Starting in July 1, 2021 we can received the child tax credit instead of waiting until filing in 2021 and receiving a lump sum?
U can received up too 50% in a six month payout July -Dec
For children Over 6 – $3000 – 50% Is $1500 divided in 6 months is $250 a month
Children under 6 -$3,600 50% – is $1800 divided in 6 months is $300 a month
The remaining 50% can be claimed when u file your 2021 taxes
If I have low income with kids. Meaning get a refund of $12k per year but I already filed for 2020. Will i get a bigger refund now due to the kids increasing to $3000?
Yes.
Thanks! Will contact my accountant.
The child tax credit is for 2021 NOT 2020
It’s not in affect for return I filed now for 2020?
No
No, the child tax credit begins in 2021. It has nothing to do with the 2020 taxes you just filed.
The only reason one would need to file an amended 2020 return is if you got unemployment last year, since those are now not taxable and that is retroactive to 2020.
Thanks for the clarification!
@Dan if you can perhaps add to the post when each benefit goes into effect, it would be much appreciated.
I guess after signing lots of executive orders to help many countries but US citizens, they are sending us some left over bones, I am not a believer of taxing hard working people to distribute the wealth but if you give billions to foreign countries you might as well give us a piece of the pie.
How does it add up to 1.9 trillion?
1.8 Trillion garbage + .1 Trillion for Covid recovery = 1.9 Trillion
Learn math, please. And/Or stop spewing fake news.
For non filers, will the have to fill out a non filers b4 receiving the stimulus?
Thanks
i think if you got last packages youll automatically get this one
Dan! You wrote that the $1,400 checks will completely phase out at AGI of $160,000 for couples without children. How much does each child add to extend the phase out?
From many online stimulus check calculators it looks like it’ll completely phase out after 160K even with many kids.
Yes, that is true. It’s a hard income cap this time, you get nothing with incomes above $160k regardless of how many kids you have, which is a bit nuts- if you have 4 kids, the phaseout rate is 84%. Last time the rate was 5% for everybody.
It phases out at 1% per $100 this time, so children don’t add to the phaseout.
How does student loan forgiveness work? I know they have deferment currently.
It hasn’t happened yet. Just setting the stage to make it more lucrative.
Somehow that is one thing Biden cannot do with “the flick of a pen”. Gonna wait for the moment that slips his mind. I think Schumer is standing by with a pen waiting for that moment 🙂
Employee Retention Tax Credit is extended through December.
July -Dec. Is it capped at 10K (up too 70%) per employee per quarter?
sorry if this was covered, but whats the cap for family with 4 kids up to age 18
No Cap
Slightly related question. For some things in taxes this year you can use your 2019 income instead if your 2020. Is that true to become eligible for the eitc credit as well? Because of PUA my 2020 income is over the limit to be eligible but my 2019 income isnt…
I saw that you wrote in reference to Unemployment: “Additionally, the first $10,200 per worker in unemployment benefits won’t be taxable and won’t count towards AGI for households making less than $150,000.” I had a question that I hope someone on this forum could help me with. I applied for unemployment last March, and continued filing until this September when I got a job BH. However, my unemployment benefits are still pending due to technical issues, so the money did not yet come in (don’t worry, I am expecting it to come through, G-d willing this week. My question is like this;
Does anyone have any information on whether this will affect my 2021 taxes? Being that I have a job this year, I don’t want any of my benefits earned in 2020 to affect the amount that I may end up needing to pay for ’21 due to a “double income”. I understand that the first ten thousand won’t count, but what of the rest, will it be added to my new income? How can I prevent that from happening?
Thanking everyone in advance!
What if I filed already and getting my refund like…tomorrow?
Why would the unemployed workers not pay taxes but I have to pay taxes for the privilege of going to work? That’s the dumbest tax rule I’ve ever seen!
I hear what you are saying, and you are totally right, but keep in mind that they are not totally exempt. They do have to pay although not on the first ten thousand… The question I am looking for a solution to is (if you look further down at my post), is not being taxed for my 2020 income based on 2021. I want to pay my taxes for 20 based on 20 and 21 based on 21, or my tax amount may be way higher than I can afford… Anyone???
Dan,
I read this today from law offices-
The plan does not include an extension of the eviction moratorium, but does provide $30 billion in additional funding for emergency rent relief programs.
Dan, can you tell me where it says it will be extended to 9/1.
Thank you.
I’m a student and don’t file Taxes and not claimed as a dependent. How can I get this money?
file taxes its really not that complicated and you can get alot of money,if you need too,call any accountant it wont cost much and its well worth it
You may want to clarify that
1. The non taxable unemployment is only for 2020 (some people that got delayed payouts bc of system flaws will get screwed from this)
2. The child credit and dependant care credit are 2021 only.
welcome to socialism. Once people get used to getting (this much) free money, there’s no turning back. Which politician will campaign against $3,600 tax credits per child? And how valuable is money when congress is willig to print trillions at will? and who will want to work hard for a salary when you can get paid $40,000 + (between child credits, unemployment, and food stamps) to sit home and do nothing. But at least we dont have mean tweets anymore.
The Chasam Sofer writes in Parshas Bechukoisay the year 5781 will be “From the dumps HE will lift the poor” so inspiring to see a Tzadiks prophecy being fulfilled.
am i understanding correctly that an unnemployed parent with 10 kids will get 30k plus 600 dollars for each one under six for a child tax credit ?all aside from the stimulus check
If they cancel student loans (and tax free to boot) I hope all the people who just finished paying off their loans after 15 years riot in Washington D.C.
Does child tax credit get capped at a certain number of children? Or does someone get tax credit for all children that they have? Thanks