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All You Need to Know About the New Stimulus Bill

You may have already or are going to receive the latest economic impact payment, but what else is included in the latest bill?

Congress recently passed legislation for a $1.9 trillion COVID-relief bill. We have compiled a list including all the details of the latest CARES Act that you need to know.

Stimulus payments

The third round of stimulus checks are set at $1,400 for all eligible recipients. Here’s who is getting checks:

  • Single taxpayers with an adjusted gross income (AGI) of $75,000 or below.
  • Taxpayers filing as heads of household with AGIs of $112,500 or below.
  • Married couples filing jointly with AGIs of $150,000 or below.

Parents will be getting checks for every child they claim as a dependent on their tax return. This includes college students and adult children with disabilities.

Older relatives living together with taxpayers will also be counted as dependents; the payment will go toward the taxpayer and not toward the dependent adult.

Higher earners will receive partial payments, but these will phase out quickly. For single filers, the amount decreases to zero at an AGI of $80,000. For heads of household, the checks stop at AGIs of $120,000, and for joint filers, the cutoff is $160,000.

Eligibility is based on the taxpayer’s income during the year of their most recently filed taxes: 2019, or 2020. To be eligible for a payment, an individual must have a Social Security number.

Like the prior rounds, payments issued through direct deposit will be distributed first. Information on the status of individual checks can be found through the IRS’s Get My Payment tool.

Changes to unemployment insurance

The relief bill will extend unemployment benefits for another 25 weeks, until September 6, 2021. The weekly supplemental benefit of $300 will continue running through that date as well.

The new legislation will also make the first $10,200 of benefits tax-free for people with an income of less than $150,000. This only applies to unemployment paid in 2020.

In addition, unemployment benefits received through the Pandemic Unemployment Assistance (PUA) program, which covers self-employed, gig workers, part-timers and others who are usually ineligible for regular unemployment benefits, will now be available for a total of 79 weeks and run through September 6, 2021.

Finally, benefits received through the Pandemic Emergency Unemployment Compensation
(PUAC) program would also run through September 6, 2021.

Health insurance

Under the relief bill, buying insurance through the government program, COBRA, will be a lot more affordable. Usually, the insured must pay a minimum of 102 percent of the premium of insurance secured through COBRA; however, the government will pay the entire COBRA premium from April 1 through Sept. 30.

Changes to the child and dependent care tax credit

The bill will expand the child and dependent-care tax credit significantly, but only for one year. The credit, which helps families offset the cost of caring for children under age 13 and other dependents, will now be fully refundable and worth up to $4,000 for one qualifying individual or $8,000 for two or more. The credit is calculated by taking up to 50 percent of the value of eligible expenses, up to certain limits and depending on your income. The credit is currently worth between 20 and 35 percent of eligible expenses, with a maximum value of $2,100 for two or more qualifying individuals.

The bill will also increase the income level at which the credit begins to be reduced from the current AGI limit of $15,000 to an AGI of $125,000.

Changes to the child tax credit

Another significant component of the relief bill is the expansion of the child tax credit. The credit is currently worth up to $2,000 per eligible child. That credit will now increase to $3,000 for children ages 6 through 17, and to $3,600 for children ages 5 and under. Also, the credit will now be fully refundable.

In addition, the bill changes the way these funds will be distributed: Half of the child tax credit may be advanced to parents before the end of 2021. Plans for the distribution are still being finalized, but lawmakers are hopeful that parents will begin receiving monthly payments toward their child tax credits for 2021 as early as July.

The bill will also change eligibility requirements for child tax credits. Payments will be based on 2019 or 2020 tax information. Married couples with a modified AGI of up to $150,000 for the relevant year (or up to $112,500 for heads of household and up to $75,000 for single filers) would receive the full value of the new benefit. After that, the beefed-up benefits would be reduced by $50 for each additional $1,000 in modified AGI.

Housing

The bill would provide billions of dollars in rental and utility assistance to people who are struggling with their housing costs and are under risk of being evicted from their homes.

Approximately $27 billion would go toward emergency rental assistance; the majority of these funds will be used to replenish the Coronavirus Relief Fund. In addition, the bill would provide nearly $10 billion to help homeowners who are struggling with mortgage payments, utility bills and other housing costs. Approximately $100 million would be dedicated to housing counseling and another $5 billion would be designated to help the homeless.

Changes to student loans

Under the new law, there would be no income tax on forgiven debt for those qualifying for loan forgiveness or cancellation, such as those who have been in an income-driven repayment plan for the required number of years. This would apply to all debt forgiven between Jan. 1, 2021 and Dec. 31, 2025.

The most recent coronavirus relief bill is both ambitious and comprehensive. Referencing these guidelines, you can learn all about the American Rescue Plan and better know what to expect going forward.

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  • The Great Giveback Official Rules

    1. Eligibility: No purchase or obligation necessary to participate and win. All participants must be 19 years of age or older at time of contest participation. Employees of Listerhill Credit Union are not eligible to register for the contest.

    2. How To Enter the Contest: All Listerhill members who have consumer loans in good standing, (subject to limitations below) are automatically entered. Anyone who takes out a new loan with Listerhill Credit Union, or refinances a loan from another lender with Listerhill Credit Union (subject to limitations below) will automatically be entered to win. Limit of one entry per loan.

    NO PURCHASE NECESSARY: To enter the contest without a loan, send a self-addressed, stamped envelope to: Listerhill Credit Union, P.O. Box 566, Sheffield, AL 35660, Attn: Great Giveback Contest Entry. Limit one entry per person. Written entries must be received no later than July 3, 2021.

    Listerhill Credit Union will not be responsible for incomplete, lost, late, misdirected or illegible entries or for failure to receive entries. All entries become property of Listerhill Credit Union and none will be returned. Any questions regarding the number of entries submitted shall be determined by Listerhill Credit Union in its sole discretion, and Listerhill Credit Union reserves the right to disqualify any entries by persons determined to be tampering with, violating, or abusing any aspect of the contest.

    3. Contest Entry Requirements: In the event the Credit Union, in its sole discretion, determines that any Entry contains content that does not comply with these Official Rules or does not otherwise comply with regulatory guidelines, Credit Union reserves the right to disqualify the entry.

    4. Determining the Winner: A Credit Union employee will select at random four (4) $500 winners (one per day July 12-15) and one Grand Prize Winner from all entries received on July 16, 2021. You do not have to be present to win.

    5. Prizes: $500 Cash Prize: the Credit Union will award four (4) members with $500 cash each. Grand Prize: The Credit Union will pay up to $25,000 toward your loan with Listerhill Credit Union, or combination of loans. No loan payments will be made to loans with any other lender. No cash equivalent provided, and the total prize amount may be less depending on the outstanding amount of loan balance(s) with Listerhill Credit Union. In no event will the prize awarded exceed the total amount of the winner’s outstanding balance of qualifying loans with Listerhill Credit Union. Federal, state and local taxes are the sole responsibility of the winner. IRS regulations require the Credit Union file a 1099 on behalf of the winner.

    A Credit Union employee will call the prize winners and the prize winners will be called up to five times during regular business hours at number provided on entry form and will leave no messages. Failure to reach winner during these calls may result in disqualification of winner, forfeiture of his or her interest in all prizes, and selection of a substitute winner drawn from the drum. Winner will be required to schedule a time, at least 48 hours in advance, to visit Listerhill Credit Union, located at 4790 2nd Street, Muscle Shoals AL, 35661 in person, during regular business hours within seven (7) days of being notified to claim prizes by providing proof of eligibility for prize won and completing and signing an affidavit of eligibility and a liability and publicity release. Failure of any Winner to timely contact the Credit Union, visit the above Credit Union office in person and sign and return any required affidavit and release, or to claim a prize or comply with any term or condition of these Official Rules, will result in drawing Winner's disqualification and the forfeiture of his or her interest in the prize. Winners may waive their right to receive prizes. Prizes are non-assignable and nontransferable. No substitutions allowed by winner.

    6. To be eligible to win, all loans must be in good standing (not more than 30 days past due at the time of drawing. Eligible loans are limited to auto loans (no indirect dealer loans), personal loans (no loans secured by real property, such as mortgages, 2nd mortgages, and Home Equity Lines of Credit) and recreation loans made to consumer borrowers (not business or commercial loans).

    6. Participation. By participating, entrants agree to be bound by these Official Rules and the decisions of the Contest. Except where prohibited, acceptance of any prize constitutes winner's consent to the publication of his or her name, biographical information and likeness in any media for any commercial or promotional purpose, without limitation the Internet, or further compensation. Prizes not won and claimed by eligible winners in accordance with these Official Rules will not be awarded and will remain the property of the Credit Union.