covid19 economic relief bill

On December 23, 2020, a huge $900 billion COVID-19 relief bill was signed by the White House to help people adversely affected by the pandemic. Many American citizens, including unemployed people and small businesses, will get direct financial aid from this bill. It is combined with $1.4 trillion government funding packages that will be used to fund government operations for the rest of the financial year. The overall financial aid package is of immense importance to all American citizens, and you need to ensure that you shall not miss out on any relevant details.

Provisions for Eligibility Criteria to Avail of Benefits Under COVID-19 Economic Bill Relief

Following are the eligibility criteria for the economic relief bill:

  • Citizenship:

The first most important requirement is that the person has to be a US citizen or US resident alien to claim the second round of the stimulus payment.

  • Adults:

The payment of $600(half the amount of the first round of stimulus payment) is granted to an adult who is above the age of 17, who has a Social Security Number valid for employment in the US, and who is not dependent on another taxpayer.
However, this time a little ease has been allowed in the eligibility for adults, mix-status families where some members have the social security numbers, and some do not, shall also remain eligible for stimulus checks.

  • Couples:

A payment of $1,200(half the amount of the first round of stimulus payment) shall provided they file jointly, are married, the spouse is surviving, and both have their social security numbers.

  • Qualifying Children:

Apart from this, a payment of $600 will be granted to all the qualifying children. Qualifying children comprise of the children, grandchildren, siblings, nieces, nephews, including stepbrothers and stepsisters of the adult member of their household. The other requirements are to live with the adult for more than 6 months and be under the age of 17 and have a valid Social security number to authorize their work. There is no upper limit mentioned for the number of qualifying children any adult can have.

  • Income Requisites:

All the above-stated criteria shall only be considered if your Adjusted Gross Income (AGI) is not more than:

  • -$75,000 for US individuals (filed by any filing system)
  • -$150,000 for all married couples (filed as joint return)

If a person does not fulfill the above requirements, the payment will get lowered.

Who are not eligible for claiming the rebate?

  • A person who is aged 17 or above (adults) and is dependent on another taxpayer’s returns
  • A person who does not have a Social security number important for the authorization of work
  • Couples who have filed for joint tax returns but one of them lacks a Social Security number.
  • People who are non-resident aliens.
  • Deceased individuals or estate or trust


Direct Payments

The US citizens and resident aliens who are not dependent on someone else’s tax returns and make less than $75,000 for individuals and $150,000 for married couples jointly filing their tax return are eligible to claim the economic relief fund. People who qualify the eligibility criteria and are single will get $600, married couples who have filed together will get $1200, and $600 will be given to every qualifying child as a stimulus check.

It is important to know that the couple should be married, and the spouse should be surviving for the couples filing jointly to get the specified amount.

For individuals who earn more than $75,000 and couples making more than $150,000, the payment is not completely stopped but decreases gradually. The more the income exceeds the limit, the lesser the receivable relief amount gets.

Jobless / Unemployed Benefits

Unemployment benefit payments are extended until March 14, 2021, and they will increase by $300 per week as a result of the December 2020 second stimulus payment package. This benefit includes not only the conventionally jobless but also those receiving Pandemic Unemployment Assistance (PUA). Therefore, gig workers, freelancers, and self-employed individuals can benefit from this amenity provided by the IRS. Those receiving unemployment insurance are subject to paying income taxes on their services.

Companies

This economic relief bill has something for companies too. The package uses $284 billion for the Paycheck Protection Program that was created in the CARES Act. It is possible to forgive the program loans to firms with less than 500 employees if companies keep employees on their payroll.

Tax Breaks

This benefit includes expansion of the deduction for business meals to 100 percent for 2021 and 2022. It also promises a renewal of the employee retention tax credit for companies and businesses that keep employees on payrolls. The intention behind this step is to encourage companies to keep people employed so that fewer people face unemployment. There is also a provision for paid leave credits, which allows the extension of the family and sick leaves to March 31, 2021.

Education

A stabilization fund shall remain active till the end of September 2022, for which the government has allocated about $82 billion. The government has also put in billions of dollars for different school funds, such as the Elementary and Secondary School Emergency Relief Fund and the Higher Education Relief Fund. Institutes will be able to use the fund money for incurring necessary expenses for infrastructure, make up for lost revenue, and technology outlays for online learning.

Pointers to consider for different entities to avail of Economic Aid

Few important points to be noted about the economic aid:

  • The checks are not taxable; that is, it will not be regarded as your “income.”
  • Gig workers or freelancers are also eligible to claim their share of money as long as they meet other eligibility criteria.
  • The authorities had begun sending out checks since December 2020. However, this arrival time may vary for various taxpayers. One can anticipate the turnaround for the second round of stimulus to be quicker than the first round. It is because the IRS has already collected taxpayers’ information.
  • Taxpayers who have already submitted IRS their bank account information will receive the payment via direct deposit. Those who haven’t done so will receive the check in the mail or a pre-paid debit card.
  • This provision uses 2019 income to determine an individual’s Child Tax Credit & Earned Income Tax Credit eligibility for the 2020 tax year.


The COVID-19 Economic Relief Bill brings Something for Everyone

The relief bill has measures of assistance for people involved across all the diverse sectors. Health, Agriculture, Small business, Education, Taxation, Housing, and Unemployment aid are among the various realms covered under the bill’s relief schemes. It is anticipated that this bill will prove as a source of immense backing for the American society’s numerous economic segments that are still struggling to tackle the blow of the COVID-19 pandemic.

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