What’s New in the Latest Stimulus Package?
As we move into year two of the pandemic, are you wondering:
What does the latest coronavirus relief package do for families?
Am I eligible for the third stimulus check?
Will the recent changes affect the 2020 income tax return I’ve already filed?
On March 11, the American Rescue Plan Act of 2021 was signed into law promising some economic relief to millions of Americans affected by the COVID pandemic.
In addition to providing funding for a vaccination program, to help schools reopen, and to aid state and local government workers, among other provisions, the new package provides three ways for Americans to receive direct financial assistance from the government.
Here are some highlights:
Economic Impact Payments – A direct stimulus payment distribution began within days after the Act was signed into law. This stimulus check has stricter eligibility requirements than the previous two, excluding higher earners. Taxpayers are eligible for the full payment of $1400, based on their adjusted gross income (AGI), under the following conditions:
- Single taxpayer – earning less than $75,000
- Head of household – less than $112,000
- Married filing jointly – less than $150,000
Dependents are also calculated differently with this package, resulting in more families receiving more generous payments.
Expanded Child Tax Credit – The income tax credit for families with children has been expanded, raising the amount of the credit as well as expanding eligibility requirements. Many families with dependents will see larger credits this time.
Federal unemployment checks – The federal unemployment payment of $300 per week, in addition to your state unemployment, has been extended until September 6.
Will the Act Affect My 2020 Income Tax Filing?
In some cases, the American Rescue Plan Act may affect your 2020 filing. For example, if you had unemployment income in 2020, you may be affected by a retroactive provision related to taxable income limits.
The IRS began accepting 2020 tax returns on February 12 – a month before the Act was signed into law. It will need time to review the Act and develop guidance for taxpayers affected for 2020. If you’ve already filed, the IRS asks that you do not file an amended return until they issue instructions.
Is COVID Still Affecting the IRS?
Although the IRS is open, some of their services have been slowed down by COVID, including:
- Telephone support
- Processing paper income tax returns
- Responding to mail
- Reviewing tax returns
You can check for updates on how COVID is affecting the IRS here.
What if I haven’t received a stimulus check?
If you haven’t received your Economic Impact Payment (otherwise known as the stimulus check) you can check your status on the IRS Get My Payment web page. The web page can help you figure out your status, type of payment, and if you meet the requirements to receive the stimulus check.
Should I Call the IRS with Questions?
If you’re concerned about a payment, your income tax refund or stimulus check, you might be tempted to call the IRS immediately. We recommend you wait! The IRS is dealing with a backlog of mail due to COVID, and of returns due to extended due dates last year. Call volumes are very high. Rest assured that the IRS is working to get caught up.
Amador Accounting Can Help
Working with the IRS can seem complicated and intimidating at times. It doesn’t have to be! Amador Accounting is here to help. If you are experiencing issues with the IRS, have questions about your taxes, or are unsure how COVID may have affected your status with the IRS, call Lisa for answers.