by Angelica Leicht | Feb. 12, 2021
Struggling to make ends meet? New momentum behind the COVID-19 relief package means that financial help and jobless aid could soon be on the way.
The momentum behind President Joe Biden's COVID-19 relief package continues to grow, with the House Ways and Means Committee approving several measures worth $593.5 billion late Thursday afternoon. These measures include financial support for Americans, who would receive direct payments, increased jobless aid, and early tax credits for children under the legislation.
These measures are just one part of Biden's $1.9 trillion COVID-19 package, elements of which are being worked on by about a dozen different House committees. These committees are expected to complete their work on the relief package today in order to clear a path for a full House vote during the week of Feb. 22.
While the individual measures approved by the House Ways and Means Committee will still have to clear several other hurdles, this vote means we're one step closer to the $1,400 direct stimulus payments and monthly advance tax credits for children that many people desperately need as the economy struggles due to the pandemic. If the COVID-19 package makes its way to the president's desk to be signed into law, here's how it could help those struggling financially as a result of COVID-19.
When the House Ways and Means Committee approved measures Thursday, it included money earmarked for the $1,400 stimulus payments. This is money that many Americans are banking on to make ends meet in the near future.
Earlier discussions about the direct payment included talks about limiting eligibility to those with lower incomes, but it now appears that the income threshold will remain the same as it was for the last two direct stimulus payments. This means that individuals making less than $75,000 and married couples making less than $150,000 would be eligible for the full payment amounts.
The difference with this round of checks is that the payments would begin to phase out at $100,000 for single recipients and $200,000 for married couples. Those who make more than the $75,000 to $150,000 eligibility limit but less than the $100,000 to $200,000 cutoff would receive partial payments. The lower income limit cutoffs are a compromise between Democrats and Republicans, who fear that high-income earners are receiving stimulus funds they don't need.
The House Ways and Means Committee is just the first stop for these proposed stimulus measures, but it's a good sign that the $1,400 direct payment stimulus checks will be hitting bank accounts sooner rather than later.
In addition to the $1,400 direct payment stimulus checks, there are other types of financial relief in this package, including monthly Child Tax Credits that would be advanced to parents on a monthly basis over the next year.
According to IRS guidelines, the current Child Tax Credit gives parents a maximum of a $2,000 credit during tax time each year. That credit is claimed on parents' taxes and received as either a credit toward money owed to the IRS or as a rebate.
If the new package passes, this Child Tax Credit would change in both the structure and the amount that parents receive. Rather than filing a credit for $2,000 in April, parents would receive a monthly advance on this credit of $300 for a child under age six. This would amount to a total of $3,600 per year. Parents with children between the ages of six and 17 would receive an advance on their tax credit of $250 per month for each child, for a maximum total of $3,000 per child.
This advanced tax credit would help put money into the pockets of parents who need it each month rather than paying it in one lump sum. The idea behind this is to help reduce child poverty at a time when millions of Americans remain unemployed due to the pandemic. The credit would also be fully refundable, according to reports.
One other notable benefit included in this proposal is a change to emergency jobless aid. If passed, this package would change the weekly extra unemployment benefits to $400 from the current $300 payments. These benefits would also be extended well past the current March 14 deadline, which is when the expanded unemployment benefits are set to end.
If passed, the new expanded unemployment benefits would last until Aug. 29 rather than expiring in mid-March. While these benefits will add another $100 per week to pockets of unemployed Americans, it's still less than the $600 extra weekly benefit that expired at the end of July 2020.
There are still a number of House committees working on individual parts of the COVID-19 package, but these committees are expected to wrap up today. The vote is expected to occur sometime during the week of Feb. 22. If the relief package is signed into law, the IRS says it is planning to issue the stimulus payments as quickly as possible.
There won't be a firm date on when payments will be sent out until a vote happens and the bill is passed. However, if we're estimating off of what we saw with the last two stimulus packages, checks could land in your bank account or mailbox in a matter of weeks after the bill is passed. It took the IRS just 19 days from the first stimulus bill's passage to the issuing of millions of checks. The second round of checks took about three weeks before the majority of recipients had received their payments.
The good news? The package could land on Biden's desk as early as mid-March. House Speaker Nancy Pelosi said Thursday that she believes the COVID relief package will be on the president's desk to sign by March 14, which is the date the current expanded unemployment benefits are set to end.
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