COVID-19 relief package: $1,400 stimulus checks, $300 unemployment benefits | Family finances
As you’re probably well aware, a $1.9 trillion coronavirus relief package, known as America’s Rescue Package, aims to help individuals and families across the country as well as state governments. and premises. It is full of financial lifesavers such as a stimulus check, improved unemployment benefits and a child tax credit.
But how much will you get? And what else is in this COVID-19 relief package that could help your cash flow? The answers to these questions follow.
How much do stimulus checks cost?
Americans will get $1,400 stimulus checks.
Specifically, if you’re single, you’ll receive $1,400, probably in your bank account, but possibly in the mail. If you are married and filing jointly, your household will receive $2,800. If you have dependents, you will also receive $1,400 per dependant.
It’s also worth noting that in the last two rounds of stimulus checks, if you had a dependent over the age of 17, you received no compensation for that person. This time it’s different: if you have an adult dependent, such as a student or an elderly parent you’re caring for, you’ll receive $1,400.
Will every taxpayer get a $1,400 stimulus check?
Alas no. If you are a single taxpayer and your adjusted gross income is less than $75,000, you will receive a full check for $1,400. If your income is a bit higher, you’ll still get a stimulus check, but not the full $1,400. If you win $80,000 or more, you will not receive a stimulus check.
If you are a married couple filing jointly and earn an adjusted gross income of less than $150,000, you will receive the full $2,800 (two checks for $1,400). If you win a little more, up to $160,000, you will receive some money but not the full $2,800. If you have children, you will receive $1,400 per dependant. So a family of four – two adults and two children – would receive $5,600.
But what if you are not single or part of a married couple? What if you are a single parent?
In this case, you would have to file your taxes as a “head of household” and you can earn up to $112,500 a year and receive a stimulus check. So if you earn $112,500 or less, you’ll get a check for $1,400 for you and $1,400 for each additional dependent. If you win a little more than that, up to $120,000, you’ll get part of the stimulus check, but not the full amount.
It has been said that Americans should start receiving their stimulus checks before the end of March.
If I am unemployed, will I continue to receive enhanced benefits?
Yes. You will receive $300 per week, in addition to your normal unemployment check. Initially, the checks were to be $400 per week, but when the bill reached the Senate, after much hesitation, it was decided to keep the enhanced benefits at $300 per week (until September 6) .
That’s probably disappointing news, but on the plus side, federal income taxes for the first $10,200 in unemployment benefits you received in 2020 (provided your household earns less than $150,000 per year ) will be deleted. Because yes, taxpayers pay taxes on unemployment benefits.
Meanwhile, unemployment benefits ultimately help everyone, even if you’re not unemployed, says Yeva Nersisyan, associate professor of economics at Franklin & Marshall College in Lancaster, Pennsylvania.
“By providing assistance to the unemployed, we are not only helping those individuals and households, but we are also keeping spending and incomes in the economy higher than they otherwise would be. Without government assistance, the unemployed would have to reduce their expenses, which leads to less income for others,” Nersisyan says, citing an example that if she stops buying coffee from her local cafe, that cafe owner will have less income.
“It all stems from the simple macroeconomic principle that someone’s spending is someone else’s income. When spending goes down, income goes down as well,” she says.
Is there a child tax credit?
Yes. The child tax credit has been expanded. Right now, if you have a child under 17, the child tax credit is worth up to $2,000 and you get it after you file your taxes. But parents of kids 6 and under will start getting monthly payments of $300 by direct deposit or mail starting in July, and parents of kids ages 7 to 17 will get $250 a month — then will claim the remainder of the year’s tax credit when they file 2021 taxes.
Ahmed Rahman, an associate professor of economics at Lehigh University in Bethlehem, Pennsylvania, says the new tax credit is a big deal.
“Research has shown that direct payments to parents improve children’s education, health and employment outcomes. Money paid to those who have children should therefore be seen as an investment and not a handout,” said Rahman said. “Payments under the current proposal are tied to the number of children rather than income level. Such cash payments would bring U.S. economic support closer to families in developed countries. We still lack other kinds support, such as the wide availability of child support or company-sponsored family leave, typical of the developed world, but it would be a good start.
Does the COVID-19 relief program affect health insurance?
The relief bill will increase government subsidies to health insurers, allowing insurance companies to reduce insurance premium rates so that your health insurance premiums do not exceed 8.5% of your income.
In other words, people who don’t have health insurance through employer-sponsored health insurance or a government plan, like Medicare or Medicaid, should consider looking for a new policy during the new Affordable Care Act enrollment period, which will go until mid-May.
Also, if you have lost your job and want to keep the health insurance coverage you had through your former employer, tax credit grants will help you pay your premiums through the federal insurance program, COBRA. , until September 30.
Does the COVID-19 relief package affect student loans?
It does, but not in a way you’ll immediately notice. There’s a provision in the package that exempts student loan forgiveness from taxes, which could help people avoid hefty tax bills if their debt is forgiven later.
So if you have student loan debt, you still have it. But, during his campaign, President Joe Biden pledged to forgive up to $10,000 in student loan debt, per individual, and if he does so through executive action. going forward, this provision prevents people from being hammered by a tax bill.
Some congressional Democrats have argued, meanwhile, for a $50,000 student debt forgiveness. So later families can see a student debt forgiveness between $10,000 and $50,000.
It would be a huge boost for everyone’s wallet, whether or not they have student debt, according to Nersisyan. “Many university graduates are drowning in debt, which drags the economy down,” she says. “Cancelling student loans would be a big boost to the economy and improve the standard of living for many Americans, especially if we cancel up to $50,000 in debt.”