April 19, 2021

What You Need to Know- American Rescue Plan Act of 2021

The new stimulus plan may have an impact on your finances. The American Rescue Plan Act of 2021 is a $1.9 trillion relief package is designed to help struggling Americans overcome financial hardship. Here’s an overview of several of its most important components that relate to individuals:

The Third Round of Stimulus Checks

When the coronavirus pandemic hit, eligible adults received $1,200 as well as $500 per qualifying child in April 2020. In January 2021, the second check for $600 was sent to those who met the criteria. Many Americans are hoping to receive a third round of $1,400 stimulus checks. The IRS will likely distribute these funds via direct deposit, checks in the mail, and debit cards. Just as they have in the past.
Receiving the latest stimulus is once again limited by income. Capped at $75,000 on single returns, $112,500 on head-of-household returns, and $150,000 on joint returns.
The American Rescue Plan will expand eligibility so that the stimulus checks are available to more Americans. Adult dependents like college students and disabled adults who were initially excluded from the first two rounds of checks will now qualify.

Higher Unemployment Benefits

Under the CARES Act, those who lost their jobs due to the pandemic received an extra $600 per week on top of their regular unemployment benefits. The American Rescue Plan Act will benefit those still unemployed by distributing an additional $300 per week through Labor Day in September 2021, while the pandemic continues to hinder employment opportunities. Self-employed individuals will benefit from these unemployment benefits as well but at a lower weekly benefit amount.

Child Tax Credits

Previously, the child tax credit was $2,000 per child age 16 or younger. The American Rescue Plan Act will increase the child tax credit to $3,000 per child ($3600 per child under age 6). It will also open up this perk to children who are 17 years old. The $2,500 earnings floor is removed for the child tax credit, and the credit is fully refundable. Additionally, qualifying Americans will receive half of the child tax credit in advance by having the IRS send periodic payments to families from July 2021 to December 2021.

Childcare Expenses

The American Rescue Plan increases the number of expenses that can be applied to the Child and Dependent Care credit on 2021 taxes from $3,000 to $8,000 if you have one child and $6,000 to $16,000 for two or more children. Since you can apply more expenses to the credit, you can save more money when you file your taxes for 2021.

Consult Your Tax Professional

It’s a good idea to review your financial and tax situation. Determine how the new stimulus plan will affect you next year when you file your 2021 taxes.
The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be speci?c financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.
At Zara Financial Group. We aim to provide an educational resource for those wanting to make intelligent decisions about their finances. Our goal is to help you live retirement the way you intended. Contact us today to schedule an introductory appointment.

The information and opinions expressed herein are obtained from sources believed to be reliable; however, no representation is made as to, and no responsibility or liability is accepted for, the accuracy or completeness of the information. The information is provided as general information and is not intended to be specific financial guidance. The information is subject to change without notice. Before making financial decisions, you should consult a financial, legal or tax professional. Providing personal information may result in contact from an insurance agent. Unauthorized use is prohibited.
2706 Alt 19 N Suite #202 Palm harbor Fl 34683
© 2021 | Built, Powered & Developed by: Simplicity Group
Disclosure |Privacy Policy |Terms & Conditions