[Update] Stimulus Round 3: $1,400 Checks; Increased Benefits for Unemployment, Food Stamps, Child Credits & More

Update 3/25/21: IRS has released guidance indicating that unemployment income (all of it – even above $10,200) does not count toward the $150,000/$75,000 income threshold. This makes a lot more people eligible for the $1,400 stimulus checks. Hat tip to CNBC and Dansdeals

Original Post:

Congress passed a third major stimulus bill today, and it’s expected to soon be signed into law by the President.

You can read the full bill here.

Contents

1 $1,400 Checks
2 Additional Payment per Child ($3,000/$3,600)
3 $4,000 Childcare Benefit
4 Earned Income Tax Credits
5 Food Stamps
6 $300 Federal Unemployment Benefit
7 Business Programs

$1,400 Checks

$1,400 in direct payments to each U.S. resident and citizen, including minors and dependents with no limit.

Calculator can be found below.
Eligibility will be based on your 2019 or 2020 tax return – could be worth doing your taxes quickly if you earned less in 2020, but you’ll end up getting the money, in any case. (If you earned more in 2020, you may want to avoid doing your tax return until after receiving the stimulus.)
Update your payment info with the IRS here.

Notable changes between this stimulus and the prior two rounds:

1. $1,400 is more than the $1,200 from the first round and $600 from the second.
2. Payment phases out from $75,000-$80,000 instead of $75,000-$99,000 from prior rounds (double all these numbers for couples filing jointly)
3. You get a $1,400 for each dependent, regardless of age, e.g. you’ll get $1,400 as the provider for your 22 year old college student or your elderly parent who is legally dependent on you.

Third Stimulus Check Calculator – American Rescue Plan

Additional Payment per Child ($3,000/$3,600)

Aside from the $1,400 stimulus deposit for each child, parents will get an additional $3,600 in payments per child age 5 and younger, and $3,000 per child age 6 through 17.

Typically the annual child credit is only $2,000, and now – for 2021 – it’s being increased to $3,000/$3,600, an extra $1,000/$1,600. Also, the credit can be received monthly, beginning July, instead of the typical lump sum payment at tax time (you’ll get half of it in monthly $250/$300 checks and the other half at tax time). Also, the credit is fully refundable whereas typically only part of it is fully refundable whereas some of it can only be used to offset income (not useful for those without much income). Additionally, age 17 is typically not eligible whereas now age 17 was added in.

The enhanced child credit gets phased out for those with incomes higher than $75,000/$150,000 single/couple. Those with higher incomes will still get the regular child credit amount based on the ordinary income limitations with no change.

$4,000 Childcare Benefit

Another major benefit for parents:

The bill also increases the amount parents can take as a tax credit for childcare expenses. Typically it’s between 20-35%, capped at most at $2,100. For 2021, it’ll max out at $4,000 and at 50% of eligible childcare expenses. This is way oversimplified version – read up on this more if it’s relevant to you.

Earned Income Tax Credits

For 2021, the Earned Income Tax Credit goes up for those without children – from the standard $543 to $1,502.

Food Stamps

The 15% increase in food stamps will continue through September (previously it was set to expire after June).

$300 Federal Unemployment Benefit

Through September 6th, the federal government will add $300 per week to your state’s regular unemployment benefit. E.g. if you are eligible for $400/week from your state, the feds will kick in $300 and you’ll end up getting $700.

This is essentially an extension of the $300 benefit from stimulus round 2 which is set to end on March 14th – it’ll now continue through September 6th.

Also, the bill exempts the first $10,200 of Unemployment Benefits from being taxable for those with income less than $75,000/$150,000 single/couple. This is for Unemployment Benefits earned in 2020 (not for 2021).