Update: The House approved the $1.9 trillion American Rescue Plan on March 10, 2021. It now goes to the president for his signature.
More economic help is on the way.
A $1.9 trillion economic aid package proposed by President Joe Biden cleared the Senate over the weekend and is headed to the House for final approval Tuesday, March 9. The president is expected to sign the bill into law, which could take effect as soon as March 14.
Called the American Rescue Plan Act, it is one of the largest economic aid packages in U.S. history, and it’s the third federal relief package since the pandemic shuttered large parts of the economy and the country, starting in March, 2020.
Here are highlights.
Individuals making up to $75,000 and couples earning up to $150,000 will receive direct payments of $1,400 per person. Dependent children will also be eligible for $1,400 checks per person. Checks will gradually phase out and disappear for people who earn $80,000 or more, and couples earning $150,000 or more.
The income caps are lower than initial earlier House plans for the checks. Biden’s initial proposal would have allowed payments for individuals earning up to $100,000, single parents making up to $150,000, and married couples earning up to $200,000.
An $300 supplemental benefit per week will remain in place for people who have lost their jobs, through September, 2021. Biden’s original plan called for increasing the supplemental benefit to $400. Federal income tax for people who lost their jobs and received unemployment benefits in 2020 will also be waived for amounts up to $10,200 for people who earned under $150,000.
Child tax credit updates
The stimulus package will temporarily increase the child tax credit to $3,600 from $2,000 for children up to the age of 5, and $3,000 for children between the ages of 6 and 17 in 2021. The bill will also expand the credit to lower-income earners who previously did not qualify for the credit. The credit will take the form of a monthly payment from the Department of Treasury.
Aid to cities, states and businesses
The bill provides $350 billion for cities, states, territories and tribal governments struggling in the wake of the pandemic. The money will go to help colleges and universities, transit agencies, as well as child care providers and food assistance organizations. Money will also go to small businesses, live venues and restaurants. Additionally, about $14 billion in aid is slated for U.S. airlines that do not furlough their workers.
The package temporarily increases subsidies for Affordable Care Act health care plans, and includes subsidies for COBRA continuation of coverage through 2021, for people who have been laid off or furloughed.
Also included is approximately $15 billion for Covid-19 vaccination distribution, and hiring of health care workers to assist in vaccination efforts, as well as $46 billion for additional Covid-19 testing, tracing, and monitoring.
Managing your money during Covid-19
Consider putting some of the payment towards savings. It might be a good idea to pad your emergency and rainy day funds with extra cash in case financial stress continues or if something unexpected like a layoff happens. Consider maximizing your savings by contributing to your retirement fund, or paying off debt.
Good to know: The U.S. Treasury is in the process of updating information about its online portal for stimulus checks, which it launched in 2020. If you have questions about stimulus checks, you can find answers from the Internal Revenue Service (IRS) here.
And for more information about managing your money during the pandemic, check out our Covid-19 resource center.