COVID-19 Update: The Pandemic Assistance Relief Package and What it Means for Families
Earlier this month, President Joe Biden signed into law the American Rescue Plan, a $1.9 trillion pandemic assistance relief package. This law is part of a larger package that President Biden released in January to provide more direct payments to Americans and give more assistance to those who remain at risk during the pandemic.
It offers Americans a number of things: the largest stimulus checks yet, tax credits for children, reduced tax liability for forgiven student loans, and funding for reopening schools. Here is a summary of what the new stimulus bill means for you and your family.
Many households are getting and will get stimulus checks
Direct payments of up to $1,400 per person are being sent to many Americans. Individuals making less than $75,000 a year and married couples making less than $150,000 a year in adjusted gross income should receive full payments. Individuals who make up to $80,000, but more than $75,000, and married couples who make up to $160,000, but less than $150,000, a year will receive money, but it will be less than the full amount.
For immigrants, payments will not be denied to citizens married to someone without a social security number. Unlike previous COVID-19 relief, households will receive an additional $1,400 for each dependent. This not only includes each child in the household, but also college students and other qualified dependent adults who are claimed on the household adults’ most recent tax filings. Furthermore, households will become eligible for an additional $1,400 payment for every child born in 2021.
Similar to the last round of stimulus checks, most individuals will not need to apply to receive payment.
If you believe you are eligible for previous payments but did not receive any or some of the prior rounds of payments, you will have the opportunity to claim so on your 2020 tax forms with the Recovery Rebate Credit.
Child Tax Credits
Many families will receive $3,600 for each child under 6 years old, and $3,000 for each child between the ages of 6 and 17. The law also directs the government to make payments in monthly installments from July through December 2021. (Versus the current child tax credit, which is only up to $2,000 per child and is offered only as a credit for end-of-year taxes, or as a one-time cash payment at tax time for households who did not owe any end of year tax payments).
The Child Tax Credit will increase from $2,000 to $3,600 for children up to 5 years old and increase to $3,000 for children ages 6 to 17. The full $3,000 child tax credit is available to individuals who declare an adjusted gross income up to $75,000 and couples reporting an adjusted gross income up to $150,000. The tax credit will phase out for individuals and couples earning more than this amount.
The payments will be paid out monthly and the enhanced credit will become fully refundable if your tax bill is zero so that more low-income parents can take advantage of it. Households with no income can also claim the credit. The IRS could start providing periodic payments of $250 for school-aged children as early as July 2021, depending on what the Treasury Department determines is workable.
More Tax Credits
Individuals that received unemployment assistance in 2020 will now have the first $10,200 in unemployment assistance tax-free for 2020. Married couples who file jointly and have unemployment insurance will be given a waiver of unemployment assistance income taxes of $20,400 if their combined adjusted gross income is less than $150,000. The IRS has not yet issued formal guidance on whether individuals that have filed their 2020 taxes will need to file an amended return.
Additionally, the Child and Dependent Tax Credit will be expanded to allow some families to claim up to half of their child care expenses for children under 13 and other dependents. This credit can also become fully refundable if your tax bill is zero. The relief package will also enhance the Earned Income Tax Credit (EITC) for workers without children by nearly tripling the maximum credit from $543 to $1,502 and extending eligibility depending on income and filing status. Individuals age 19 to 65 are eligible, with the exception of certain full-time students. Those whose children do not have social security numbers will be permitted to claim the EITC available to childless households.
For 2021 only, individuals can now also set aside $10,500 for dependent care accounts instead of $5,000 if the employer allows the change.
Unemployment Benefits Are Changing
There is now a $300 per week federal supplement to jobless benefits until September 6.
Contact The Illinois Unemployment Office for additional information about eligibility and filing requirements should you need it.
For immigrants, unemployment insurance payments are not generally taken into consideration by the DHS for purposes of making a public charge determination for those looking to complete visa and citizenship applications.
There is Continued Food Assistance
Food stamp recipients continue to receive the 15% increase in benefits until September (originally set to expire in June). To learn if you qualify and want to apply for benefits, you must contact the Illinois local office.
If you are struggling to pay rent, there will also be continued help. However, this legislation does not extend the nationwide eviction moratorium that expires at the end of this month.
To qualify for financial assistance, your household must meet some requirements. For more information on how to obtain state and local assistance, visit the National Low Income Housing Coalition.
Student Loan Changes
Federal law usually treats forgiven debt as taxable income, however, the new assistance will remove taxes on forgiven student loan debt through 2025. This latest change would give President Biden the option of forgiving student debt through executive action without burdening thousands of Americans with a new tax bill.
Small Business Assistance
There is now also a $25 billion grant program specifically for bars and restaurants. Eligible businesses and any affiliated businesses (such as a restaurant group) can receive up to $10 million in assistance, and can use the money for a variety of expenses, including payroll, mortgage and rent, utilities, maintenance (including outdoor seating construction), supplies, PPE, cleaning materials, and food and beverages. The eligibility amount will be determined based on pandemic-related revenue loss.
The Paycheck Protection Program (PPP) will also get an additional $7.25 billion in federal assistance to provide forgivable low-interest loans to more nonprofit organizations (including gurdwaras) than ever before. The Small Business Administration (SBA) is administering the PPP loans and is taking loan applications until March 31 to assist businesses and nonprofits (including gurdwaras) on a first come, first serve basis. Businesses and nonprofits that previously obtained a PPP loan may also be eligible for a Second Draw PPP loan.
Small business owners and nonprofits can also take advantage of $15 billion in the Emergency Injury Disaster Loan Program (EIDL). The EIDL will give priority to severely impacted businesses with less than 10 employees. The EIDL is a federal long-term, low-interest loan from the SBA. EIDL funds can be used for working capital and normal operating expenses (healthcare benefits, rent, utilities, fixed debt payments, and payroll). EIDL loans do not require payments for the first year as it is deferred, however, interest will continue to accrue.
If you need additional information about financial assistance available to your business or nonprofit, you can search for a local assistance partner through the SBA. These partners can help guide you through federal, state, and local assistance programs.
Increased Vaccine Access
COVID-19 vaccine distribution and testing will receive $160 billion in new funding so that more people can get vaccinated.
The Department of Health and Human Services has stated that it will not require anyone to provide personal information such as a driver’s license, passport, or other documentation to prove citizenship in order to obtain a vaccine.
Health Insurance Assistance
More Americans will now qualify for federal subsidies under the Affordable Care Act for the next two years with $34.2 billion in additional funding. Enrollees would pay no more than 8.5% of their income towards coverage. Insurance subsidies are determined based on the federal poverty rate—individuals earning between $51,520 and $106,000 for a family of four would qualify. Lower-income enrollees could have their premiums eliminated completely, and those collecting unemployment benefits could sign up for coverage with no premiums in 2021. These changes will be effective immediately and last through the end of 2022; they would not require anyone to re-enroll to access the lower prices. If you don’t already have health insurance, an open enrollment period is in effect through May 15.
Impact on Citizenship
Accessing any of the forms of relief provided for by the American Rescue Plan will not impact your or your family’s visa or citizenship application.
Please be aware, though, that if you are an immigrant, obtaining other federally funded benefits, apart from those provided under the American Rescue Plan, CARES Act, or previously passed Families First Coronavirus Response Act, could impact future visa and citizenship applications. You can see a factsheet on this here.
In addition, the U.S. Citizenship and Immigration Services (USCIS) has announced that the agency will not consider “testing, treatment, nor preventative care (including vaccines) related to COVID-19” as part of a public charge determination. They are encouraging anyone with symptoms that resemble COVID-19 (e.g., fever, cough, shortness of breath) to get the necessary medical treatment and preventive services.
The latest relief also provides $130 billion to schools and colleges to help them re-open. The money can be used to modify classrooms to allow more social distancing, install ventilation systems, hire more custodial staff, and buy personal protective equipment. The money can also be used to increase the hiring of nurses and counselors and to provide summer school.