For several months, the possibility another COVID-19 relief package — and, of course, stimulus checks — has been a popular topic of conversation across the country. Now a year into the pandemic, Congress has passed the American Rescue Plan Act, which includes the third round of stimulus checks, as well as several other efforts aimed to lessen the financial strain put on American individuals, families and businesses since last March.
Here’s what you can expect:
What is included in the American Rescue Plan Act?
The $1.9 trillion stimulus package includes several big-ticket line items that are intended to positively impact millions around the country. Some notable aspects of the bill include:
- Direct payments: $1,400 checks for eligible individuals
- Unemployment benefits: Federal unemployment payments will remain at $300 per week through Sept. 6.
- Expanded child tax credits: Maximum child tax credits increased to $3,600 for children under six and $3,000 for those six to 17
- Small business loans: An additional $7.25 billion will be available to small businesses through the Paycheck Protection Program (PPP)
- Rental assistance: $25 billion for emergency rental assistance will include $5 billion rental vouchers for those experiencing homelessness or people who are survivors of domestic abuse or human trafficking
Keep reading: Learn more about the expanded child tax credits and how they may benefit your family and impact communities at large.
Other provisions included in the 600-plus pages of the American Rescue Plan Act provide financial assistance to the restaurant industry, educational agencies, and more. But you probably want to learn more about the stimulus checks and if (and when) you might expect to receive one, so read on.
Stimulus Payment Income Limits
Similar to the $1,200 payments provided to taxpayers through the CARES Act in early 2020 and the $600 payments from the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, the third round of stimulus money will be sent to eligible people based on adjusted gross income (AGI).
This round of payments provides $1,400 for individuals who make up to $75,000, or who make up to $112,500 and file as the head of the household, and $2,800 for couples filing jointly that earn up to $150,000. You may also receive an additional $1,400 for each dependent claimed on your tax return. (This is in addition to the child tax credit that you may be eligible for as well.)
Like the first two stimulus checks, payment amounts will phase out as incomes rise — but this time, they will reduce at a faster rate. The income cutoff for individuals is $80,000 (reduced from $100,000) and for couples filing jointly is $160,000 (reduced from $200,000).
Stimulus Payment Qualifications
To qualify for the third round of stimulus money, you must be a taxpayer with a Social Security number. Then, your eligibility will be determined by the income limits described above, based on the AGI recorded on your most recent tax return (2020 or 2019 if you have not filed yet this year).
This is the first time payments will also be provided for all eligible dependents. For the first- and second-round, $500 and $600 payments respectively were provided only for dependents 16 years old or younger. This time, qualified recipients will be paid an additional $1,400 for every dependent — including college students, elderly parents, and disabled adults.
Receiving Your Stimulus Payment
If you are eligible for a stimulus payment, you should receive it through direct deposit based on the information the IRS has from your tax return. If they don’t have your details, you should receive a paper check or pre-paid debit card in the mail. You can check the status of your payment using the Get My Payment tool.
What To Do with Your Stimulus Check
For millions of individuals and families, the third round of stimulus payments is a much-needed source of financial relief during this prolonged period of instability. It’s totally up to you to decide how you want to use it, whether that’s to pay off credit card debt, get ahead of next month’s rent, pad your emergency fund, invest in the stock market, or something else.
Remember, windfall money can be a great asset to help you get closer to your financial goals. For more ideas on how to make the most of your stimulus check, take inspiration from Anand Talwar, Ally’s deposits and consumer strategy executive.
Payment three is on the horizon.
The American Rescue Plan Act includes a number of measures that will be beneficial to millions, and the third direct stimulus payment is no exception. If you are one of nearly 90% of tax filers who will receive a payment, keep a close eye out for your direct deposit or mailed check. And until then, consider planning how you can best put your $1,400 to use and how Ally can help.
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