The House Passes a $1.9 Trillion COVID-19 Relief Package
On Wednesday, March 10th, the House is expected to pass a $1.9 trillion COVID-19 relief package, it would include $1,400 direct payments to be sent to millions of households, an extension of unemployment benefits and funding for vaccine distribution. Below is brief overview of what is included in the bill:
Child tax credit
- The bill would expand the child tax credit in 2021, the measure would increase from $2,000 to $3,600 the credit for children under 6 years old, and to $3,000 for older children. The additional amount would phase out for individuals with income above $75,000, head-of-household filers with income above $112,500 and $150,000 for married couples filing jointly. The bill would also make the credit fully refundable, and it would make 17-year-olds eligible for the credit.
- The IRS is directed to make periodic advance payments of the credit, so that households could receive the credit in installments throughout the year instead of having to wait to file their taxes to receive all the money.
Earned income tax credit
- The bill would expand in 2021 the earned income tax credit (EITC) and it would expand the eligibility and amount of the credit for workers without children and allow married but separated spouses to claim the EITC on separate returns in certain circumstances.
- It also would allow taxpayers to use their 2019 income for purposes of the credit instead of their 2021 income.
- Both the portions of the bill on the earned income tax credit and the child tax credit would direct the Treasury Department to make payments to U.S. territories to help reimburse the cost of the credits in those jurisdictions.
- The bill would provide about $15 billion to the child care and development block grant program. States would be able to use the funds to help essential workers regardless of those workers’ income.
- The measure also would provide about $24 billion for states to provide grants to child care providers.
- Additionally, the bill would expand in 2021 the child and dependent care tax credit and would increase the amount of a tax exemption for employer-provided dependent care assistance.
- The bill includes an $86 billion for multi-employer pension funds.
- The bill contains $30 billion to bolster local subway and bus systems, which have seen their revenues collapse with people working from home. Ridership plummeted 79 percent in 2020, per the American Public Transportation Association.
- The bill also includes $8 billion for airports, $1.5 billion for furloughed Amtrak workers, and $3 billion for wages at aerospace companies.
- The rescue plan provides $27.4 billion in emergency rental assistance for eligible people.
- Another $10 billion is set aside to help homeowners avoid foreclosure.
- The bill gives $5 billion in vouchers for public housing, another $5 billion to tackle homelessness and $5 billion more to help cover utility bills.
- The American Rescue Plan broadens eligibility guidelines for the Paycheck Protection Program, allowing more nonprofit entities to be eligible. It tops off the program’s funds and adds $15 billion in emergency grants.
- It also sets aside more than $28 billion in funding for restaurants.
Affordable Care Act
- It increases Affordable Care Act subsidies through 2022. It will allow individuals earning up to 150 percent of the federal poverty level to purchase an insurance plan with premiums fully subsidized by the federal government. Enrollees would have to pay no more than 8.5 percent of their income in health insurance premiums.
- Expanding Medicaid to people earning up to 138 percent of poverty, and the federal government will pay 90 percent of the costs. Under the legislation, newly expanding states would also receive a 5 percent bump for their traditional Medicaid programs for two years. New federal funds under that 5 percent bump are more than two times larger than new state expansion costs.
- Extends unemployment benefits of $300.00 to the unemployed until September 6th.