STORY BY AUSTIN ASSET
The American Rescue Plan Act, a $1.9 trillion stimulus bill, was passed and signed into law by President Biden on March 11, 2021. Aimed at assisting with the economic shortcomings of the pandemic, this legislation covers a broad base of pandemic-related initiatives. At Austin Asset, we make it a priority to unpack recent legislation and understand the impact on our clients financially. Concerning the
Stimulus Payments
OTL / PUTT FOR DOUGH
AMERICAN RESCUE PLAN ACT OF 2021
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THE ‘O’ ISSUE 2021
American Rescue Plan Act, we will discuss the key elements of this bill, and how it could have financial implications in your life and the lives of others. In doing so, we will address the impact of this bill on the following key areas: stimulus payments, the Child Tax Credit, Child and Dependent Care Tax Credit, unemployment aid, COBRA, and the expansion of PPP loan eligibility for businesses.
The American Rescue Plan Act included direct stimulus payments of $1,400 to eligible individuals with an AGI of $75,000 or less ($150,000 or less for MFJ). If you are below these thresholds, you will receive the full amount. However, if you exceed the AGI threshold of $80,000 for single filers or $160,000 for married filing jointly, you will not receive any of the $1,400 stimulus payment. Alternatively, if your AGI is in between the two numbers in the phaseout range, you will receive a reduced stimulus payment. This new stimulus package also expands the eligibility from children under 17 to include all dependents in the household. This includes college students or adult dependents. It is important to note that the IRS will determine your stimulus eligibility based on your 2019 tax return, or 2020 tax return if filed. To receive the stimulus payment, you must not be a dependent of another taxpayer and
have a valid social security number. As far as the payment timeline is concerned, the IRS designated March 17, 2021 as the official stimulus payment date. Most people who are eligible for the stimulus payment will receive their payment via direct deposit if this information is already on file, requiring no action on their end. On the other hand, if you are eligible for a stimulus payment, but your direct deposit information is not on file, you will receive payment in the form of a check or debit card. If you receive a debit card in the mail, which is called the Economic Impact Payment Card, it should come in a white envelope with the U.S. Department of Treasury seal. The IRS said this will be a Visa card with MetaBank listed on the back of the card. If you would like to track the status of your stimulus payment, the IRS has a “Get My Payment” page where you can discover more information specific to your stimulus payment.
