The third stimulus check is poised to turn into a complete relief plan to ride over the economic downslide caused by the pandemic. And it is a fact that the American Relief Plan promises to do just that; bring much-needed relief to every stratum of American society. The stimulus package will address the havoc caused by the current pandemic.
The package has measures to address the needs of struggling families, small businesses, plus other diverse communities. It also seeks to contain the pandemic through tests, tracing, and total vaccination. The measures being taken will surely help people receive their share immediately after it takes effect.
How Much And To How Many? Who Gets What?
The amount that each individual, family, or others will receive depends on their financial situation. Quite a few things have changed since the first two stimulus checks. The programs, the rules, and the scope have been tweaked in places and overhauled in others. How much the package delivers will only be clear after the completion of the legislative process. It will culminate with the Presidential signature expected within this week.
The Third Stimulus Check As It Stands Now
Americans have received $1,200 in the first installment in spring last year and $600 more at the end of December. The figure of $1,400 is not constant and an individual could receive more or less depending on various factors.
A Faster Phase-Out For The Third Stimulus Check
The previous installments were calculated based on the ASI (Adjusted Gross Income). The stimulus checks gradually decreased with the increase of every dollar over $75,000. The AGI is calculated as the total wages and other income including interest, retirement contributions, etc. The payments in the last two instances decreased by 5%, for every increase of 1 dollar over the limit. Thus for the first installment under the CARES ACT of $1,200, the payment would peter out for income above $99,000 for individuals and $198,000 for families. The corresponding figure was $87,000 and $174,000 for the second stimulus check. The purpose was to ensure that high-income taxpayers did not receive the aid.
In the present version of the bill, the threshold income has remained constant. But the phasing out will be quicker and individuals with income of $80,000 ($160,000 for families) and above will not receive a penny. The third stimulus checks payout decreases by $0.32 for an increase of $1 in income.
The Definition Of Dependents Under The Third Stimulus Check
Individuals and families with elderly dependents will receive more. Earlier, the definition of dependent was narrow and applied to only those under 17 years. But under the third stimulus check, it also includes those over 16 years. This definition is broad-based and includes older adults with various disabilities and college-going students. This would increase the count of individuals eligible for the third stimulus check by 13.5 M. Each dependent would get up to the maximum of $1,400. Payments made to dependents would be added and would phase out at the same rate.
Various Other Assistance Expected By Families
The third stimulus check would cost around $400 B of the $1 T earmarked for assisting families. But a part of the outstanding $600 B could directly benefit individual Americans. Other assistance that is part of the Bill includes extensive unemployment remuneration, a more than liberal child tax credit, among others.
March 14 is the final date when the insurance bonus for federal unemployment finally ends. It is worth $300. The proposed Rescue Plan could see it extended through the 6th of September.
The initial $10,200 of the unemployment benefits will be tax-free for households with income below $150,000. People eligible for PUA (Pandemic Unemployment assistance), meant for gig workers and freelancers, and the PEUC (Pandemic Emergency Unemployment Compensation), for workers who have used up their benefits will benefit too. Their benefits will also be extended through September 6. PUA ends after 79 weeks and the PEUC after 53.
Assistance For Children Under As Addition To The Third Stimulus Check
Under the provision of the new Child Tax Credit, children up to 5 years would receive $300 from the IRS, while those between 6 and 17 would get $250 every month. This amounts to $3,600 and $3,000 respectively per annum, instead of the present $2,000. Payments will be automatic and along lines similar to the third stimulus check. It will not be reliant on the present tax burden. Outstanding taxes would not affect payments. These additions payment would rapidly phase out above earnings of $75,000 for individuals and $150,000 for couples.
There would also be a generous revision of the Child and Dependent Care Tax Credit. It would go up to $4,000 per child and double for more. The amounts would begin decreasing at an AGI of $125,000 for households.
Money-Saving Programs As Part Of The Third Stimulus Check
A large number of Americans stand to benefit under the money-saving programs included in the American Relief Plan. The stimulus package assists a further $25 B as rental assistance while $10 B is for mortgage assistance. People who have been laid off and had health insurance under COBRA would receive assistance from the government from April to September. The Consolidated Omnibus Budget Reconciliation Act enables employees and their families the right to continuing health insurance at discounted rates when coverage is lost due to specified events. Health insurance policies would be 8.5% maximum of individual AGI for those bought through the government exchange.
Supplemental Nutritional Plan
Also within the American Rescue Plan is the proposal to extend the Supplemental Nutrition Assistance Program. The added 15% provided under the second plan will be extended through September. Under this scheme, individuals could get up to $27 per month and families $100.
Other Provisions That Are In Addition To The Third Stimulus Check
Small communities and businesses also stand to benefit. 26 states have experienced budget shortfalls. Around 1.3 M jobs were lost as governments balanced their budgets. An allocation of $360 B will address these issues. Another $30.5 B has been allotted towards transit systems, $10 B for infrastructure deemed critical, and $15 B for airlines. Restaurants would get $25 B.
Helping people to get on with their lives would ease the effect of the pandemic. The vaccine sector will be allocated $76 B. That includes $15 B for distribution and administration of vaccines, $48 B for national testing and tracing $ 6B for R&D, and a billion more for awareness.
Schools and colleges would get $128 B and $39 B respectively. Ensuring paid leave for affected employees has also been made a part of the bill.
The Need For Further Stimulus After The Third Stimulus Check
The 3.5% decline in the economy is the highest since the Second World War. Unemployment figures are sky-high. 745,000 have applied under unemployment insurance in the 4th week of February, almost 4 times the normal figure. Another 437,000 applied for Pandemic Unemployment Assistance. The rate of unemployment stands close to 10%.
Besides the third stimulus check, other important measures would be a jump in the vaccination efforts. Only 18.1% have received their first dose and 9.% their second.
Will Johnson and Johnson entering the fray, the boost in the production of vaccines will ensure around 4 million doses per week. With 527,000 deaths and 29 million cases, basic precautionary measures remain as important as the third stimulus check.
