By Alyssa Walrad
The coronavirus pandemic has seemingly taken a positive turn over the last few months, with the development and distribution of vaccines from Johnson & Johnson, Moderna and Pfizer. Yet, millions of Americans continue to suffer financially, with unemployment benefits running out and layoffs continuing to increase. As of March 6, the Senate voted in favor of the American Rescue Plan, which is set to be voted on by the House on March 10, swiftly moving to President Biden’s desk along with a $1,400 stimulus check for individuals who meet the qualifications set by legislators. The House is said to vote on the bill on March 9. If passed, it will move swiftly to Biden and will then be distributed by the IRS within days. This massive $1.9 trillion package features aid in a variety of ways, and may be complicated or delayed with the upcoming tax season approaching. Here are some details that help explain the bill and answer some frequently asked questions:
- The last two stimulus checks were calculated and distributed based on your 2019 tax returns. If you have not yet filed your 2020 tax return, this round of aid will also be based on the previous years filing. Chances are however, if circumstances have changed for you in 2020 (losing your job, having a child, etc.), it is encouraged to file as soon as possible with all accurate documentation. Stimulus payments from the previous two rounds can be claimed on Line 30 of your tax return.
- Income caps have been changed from the previous distribution guidelines. Single filers who make less than $75,000 will receive the full $1,400. If you file as “head of household,” the maximum is $112,500 and $150,000 for couples who file jointly. Tax payers will also receive an additional $1,400 for each dependent child. This means if your parents still claim you as a dependent on their taxes, you will not receive this payment. To determine if you are eligible for this round, check Line 8b on your 2019 Federal Tax return, or Line 11 on Form 1040 and 1040-SR for the 2020 tax year.
- The IRS has distributed relief aid through prepaid debit cards, mailed paper checks and direct deposit. This round will also be distributed through these methods, but are not guaranteed you will receive your payment through the same means you did in the previous rounds. Based on the previous two rounds, we can assume that direct deposit recipients will be the first to receive their payment, followed by paper checks and EIP cards. It is recommended that when you file your 2020 tax returns, you sign up for direct deposit with the IRS for a higher probability of a more timely pay out.
- The age cut off for dependents has changed. This difference can now include disabled adult children and dependent college students, but dependents will not receive said payment, only the taxpayers. Self-supporting college students or young adults who cannot be claimed as a dependent are likely to receive $1,400.
- Unemployment benefits can continue if passed, with your claim and $300 weekly federal boost continuing under two pandemic unemployment programs through Sept. 6.
The latest projections claim that President Biden will sign the bill by March 14 with benefits to those who qualify, being distributed to the first wave of recipients by the end of the month.