Stimulus checks, tax changes and more are included. See what might impact you.
Monday night, both chambers of Congress passed a $1.4 trillion spending bill that funds the government through September 2021 and a $900 billion stimulus measure to provide economic help to individuals through the pandemic. The bill extends several provisions in the CARES Act (passed in March of this year) and includes year-end tax changes.
Headlining the bill is a second round of stimulus checks. Individuals are eligible for up to $600, married couples filing jointly can receive up to $1,200, and taxpayers receive an additional $600 for dependent children under the age of 17. Like the CARES Act, the payments are subject to phaseouts starting at adjusted gross income (AGI) of $75,000 for single taxpayers and $150,000 for married filers. For every $100 of income above those limits, the payment is reduced by $5.
As an example, if you are single and make less than $75,000 per year, you will receive $600. If you are single and make over $87,000 you won’t receive a payment. If you are married, file jointly and earn less than $150,000, you will receive $1,200. If you are married, file jointly and make over $174,000 you won’t receive a payment. Falling between the limits outlined here means your check will be reduced from the full amount, but not totally reduced to zero until you exceed that upper limit. If you claimed dependent children on your 2019 tax return (what the government will use to calculate potential phaseouts), each child will increase your payment by $600, subject to the same phaseout limits.
Also included in the bill are measures extending increased unemployment benefits that previously were set to expire on December 26th. The extensions are to Federal Pandemic Unemployment Assistance that supplements state unemployment insurance compensation by $300 per week, Pandemic Unemployment Assistance that expands unemployment insurance compensation to those typically ineligible (think independent contractors, gig economy workers, etc) and Pandemic Emergency Unemployment Compensation which provides additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits. All are now extended to March 14th, 2021.