$1.9 trillion " American Rescue Plan " COVID relief bill on its way to President Biden
House Democrats passed a $1.9 trillion coronavirus relief bill today, sending one of the biggest stimulus plans in U.S. history to President Biden to sign this week. The “American Rescue Plan” looks to make tax filing even more complex. For some who have already filed, it may lead to amending their return.
A major update in the bill is a provision that waives taxes on the first $10,200 in unemployment insurance income for individuals who have 2020 adjusted gross income of less than $150,000. For married couples filing jointly who both had unemployment insurance, the tax-free amount is $20,400, but combined adjusted gross income must still be less than $150,000.
The legislation also:
- extends a $300 per week jobless aid supplement and programs, making millions more people eligible for unemployment insurance until Sept. 6.
- sends $1,400 direct payments to most Americans and their dependents. The checks start to phase out at $75,000 in income for individuals and are capped at those who make $80,000. The thresholds for joint filers are double those limits. The government will base eligibility on taxpayers’ most recently filed tax return.
- expands the child tax credit for one year. It will increase to $3,600 for children under 6 and to $3,000 for kids between 6 and 17.
- adds $25 billion in rental and utility assistance and about $10 billion for mortgage aid.
- includes an expansion of subsidies and other provisions to help Americans afford health insurance.
- offers nearly $30 billion in aid to restaurants.
- expands an employee retention tax credit designed to allow companies to keep workers on payroll.