Here's Everything You Need to Know About the COVID-19 Relief Bill That Just Passed
From stimulus checks to student loan forgiveness.
ICYMI: Congress approved a massive coronavirus (COVID-19) relief package, aptly dubbed The American Rescue Plan, on Wednesday, March 10th. Voted on almost entirely along party lines, the plan is one of the largest economic rescue packages in U.S. history, according to The Washington Post.
While a previous version of the bill had already been passed in late February by the House, another pass was necessary after the Senate made several amendments—namely, a reduction in unemployment insurance (taking it from $400 down to $300 per week), as well as a reduction in who qualifies for aid. This was necessary to secure the bill's passing, as moderates—West Virginia Senator Joe Manchin, in particular—insisted a bit more middle-ground in order to vote in approval.
"This legislation is about giving the backbone of this nation—the essential workers, the working people who built this country, the people who keep this country going—a fighting chance," President Biden said of the bill in a White House press statement. It's worth noting that in addition to being a win for the people, the bill is also a major win for Dems, as a sweeping relief plan was one of the party's biggest promises during the 2020 election.
Keep reading to find out how the newly-passed bill might affect you.
What's included in the COVID-19 Relief Bill:
Stimulus checks for millions of Americans
Two stimulus checks were sent out as part of Trump's relief plan. While the first was $1,200 per individual, the second rang up at half that for $600 per person. Now, individuals can expect up to $1,400 for their next check—if they're eligible, that is.
Where the original House-approved plan capped the stimulus threshold at $100,000 for individuals and $200,000 for couples, the approved plan lowered that to $75,000 or less for individuals and $150,000 or less for married couples. If, however, you make just over those caps, you may still be eligible for a fraction of the stimulus—just not the full $1,400. However, they will disappear entirely if you make more than $80,000 (for individuals) and $160,000 (for married couples).
The checks will start being distributed this month. To find out if you'll qualify for a stimulus check, click here to check out CNN's Stimulus Check Calculator.
Potential paid family and sick leave
If you're sick or if you're helping to care for a family member who has come down with COVID-19, help may be in store. That's because while the bill doesn't reinstate mandatory paid family and sick leave, it does provide tax credits to employers who voluntarily offer the benefit through fall 2021. As such, your employer may feel more inclined to give you a break.
More access to health insurance
Currently, the Affordable Care Act enrollees are paying nearly 10% of their income toward insurance coverage. Thanks to the new bill, payments will be no more than 8.5%. While a 1.5% reduction may not seem like a lot, it adds up. What's more, if you're on the lower end of the income spectrum, you may even be exempt from paying premiums altogether for up to two years. And, if you're unemployed, the option now exists to sign up for ACA coverage with zero premiums in 2021. But that's not all. If you've recently been laid off, there's still hope. If you want to maintain your employer's insurance through COBRA, you won't have to pay any premiums between April and September of 2021.
Student loan forgiveness
One of the most exciting—and admittedly least advertised—aspects of the new relief bill is the fact that it makes student loan forgiveness tax-free through 2025. This means that if student loans are canceled further during COVID or if Biden forgives them all together with an executive order, taxes on the loans won't have to be paid.
In an interview with Bankrate, Curtis Campbell, president of TaxAct, says that "borrowers whose student loans are forgiven will no longer be responsible for paying taxes on the canceled amount from 2021 to 2025. This means instead of reporting the forgiven student loan debt as income on their taxes, as typically required, a person who has already signed up for income-driven repayment plans and expects those student loans to be forgiven, will not have to pay income taxes on that forgiven debt for the next five years."
Extended unemployment benefits
One of the most advertised elements of the bill lies within unemployment benefits. While reduced from the initially proposed $400/week, unemployed individuals can find solace in the fact that federal benefits will dole out an additional $300/week on top of state benefits, from now through September 6th. Additionally, the first $10,200 of benefits are non-taxable, so long as your household makes below $150,000 a year.
Notable tax credits for families
Current tax credits are up to $2,000 per child under the age of 17. Thanks to the new plan, however, a child tax credit of $3,000 for each child under age 18, and $3,600 for each child under age 6 is approved. These credits are only available to those who are eligible: single parents earning up to $75,000 and couples making up to $150,000 a year. The credit will be reduced by $50 for every additional $1,000 of adjusted gross income earned.
More funding for public schools, as well as state and local governments
Hundreds of billions of dollars are being allocated to state and local governments, as well as public elementary, middle, and high schools in an effort to help them re-open safely.
Of the $350 billion set aside for local and state governments, roughly $20 billion is being set aside to help low-income households bounce back from back rent. "It authorizes about $10 billion to help struggling homeowners pay their mortgages, utilities and property taxes," CNN reports. So, if you're behind on rent or mortgage payments, help may be on the way.
That goes for people who don't pay rent or mortgage payments, too. According to CNN, $5 billion is set aside to help states and local jurisdictions address homelessness during the pandemic.
Major restaurant relief
While everyone is struggling from the pandemic, few industries are as ravaged as small businesses and restaurants. The new bill includes $50 billion for small businesses, including $25 billion specifically for small restaurants and bars. "Eligible businesses may receive up to $10 million and can use the money for a variety of expenses, including payroll, mortgage and rent, utilities, and food and beverages," CNN reports.
Additionally, $7 billion is allotted for the Payment Protection Program, which "provides loans to help businesses keep their workforce employed during the coronavirus."
COVID-19 testing and vaccinations
Given COVID-19 is the cause of the need for this bill in the first place, it's only fitting that $20 billion included within it is specifically for vaccine distribution and the CDC's vaccine-awareness campaign. An additional $50 billion is dedicated to making COVID tests more readily accessible.
What's not Included in the COVID-19 Relief Bill:
Now that you have the full run-down on the most prominent components of the American Rescue Plan, you might be wondering if you missed something, given minimum wage wasn't addressed. Unfortunately, the Senate parliamentarian ruled in late February that increasing the minimum hourly wage to $15—something Senator Bernie Sanders attempted to amend to the final bill—would not be possible at this time. It failed in a 42-58 vote.