After months of negotiation and deliberation, Congress finally passed an updated stimulus bill passed last week. This bill will bring relief to millions of people and small businesses in the form of economic relief and direct cash payments. It’s an important boost that will immediately benefit city, local, and state economies.
Although millions will directly benefit from the stimulus bill in the form of a stimulus check, the stimulus bill contains other provisions that could help in other ways. Here’s a stimulus bill update.
Child Tax Credits
First, the stimulus bill features changes to child tax credits. Most Americans would receive $3,000 a year for each child that’s 6 to 17 years old. Most Americans would receive $3,600 for each child under 6 years old.
The child tax credit would last one year, and it will be sent through direct deposit. Previously, this amount was up to $2,000 for children up to 16 years old.
Small Business Funding
- More than $7 billion will fund PPP Loans, which will bring the total invested for small businesses up to almost $813.7 billion.
- The bill allocates $25 billion for restaurant revitalization. The Small Business Administration will use $5 billion to help businesses earning under $500,000.
- The stimulus bill also provides $15 billion towards the EIDL program. A portion of this money will extend the Shuttered Venue Operator (SVO) grant.
The SVO Grant program is available for certain businesses hit hardest by the pandemic:
- Live performing arts organization operators
- Live venue operators or promoters
- Motion picture theatre operators
- Relevant aquariums, museum operators, and zoos who meet specific criteria
- Talent representatives
- Theatrical producers
To qualify for the SVO Grant program, businesses must have been in operation as of February 29, 2020 and the promoter or venue must not have applied for or received a PPP Loan on or after December 27, 2020
Finally, the new stimulus bill will provide an extension to the current Employee Retention Credit (ERC), in place for start-ups and other businesses. This credit allows eligible employers to claim a refundable tax credit against the employer’s share of Social Security tax.
The credit can be up to 70% of qualified wages paid to employees from December 31, 2020 to June 30, 2021. There is a maximum of $10,000 per employee per calendar quarter in 2021.
The maximum ERC amount a small business may receive is $7,000 per calendar quarter, or up to $14,000 during 2021.
Stimulus Check Payments
The third stimulus bill also features $1400 stimulus check payments. This stimulus check portion of the stimulus bill amounts to about $400 billion of the nearly $2 trillion bill.
Stimulus Check Eligibility Changes:
- To receive the full $1,400 payment, individuals can earn up to $75,000 annually and couples can earn up to $150,000 annually.
- If you individually earn more than $80,000 annually, or more than $160,000 annually as a couple, you won’t receive the third stimulus check.
- Heads of households can receive the full $1,400 payment if they earn less than $112,500 annually.
- If you earn more than $120,000 annually as a head of household, you won’t qualify for the third stimulus check.
The IRS will determine your income for the most recent tax return year:
- If you’ve filed taxes for 2020, the IRS will determine your eligibility for this tax year’s income.
- If you haven’t, but filed taxes in 2019, the IRS will use your income from 2019 return to determine eligibility.
- You won’t owe any money if your income in 2019 was less than your 2020 income.
- You may be able to receive a larger stimulus check if your income fell in 2020 if you file your taxes before receiving a stimulus check.
A second stimulus check update is with the relaunch of the IRS Get My Payment website. This is a free service for anyone who qualifies, and it lists the status of your refund in three categories.
Another development with the third stimulus check is that dependents over 17 years old living are now eligible to receive the same $1,400 payment as family members who qualify.
The stimulus bill features several updates to unemployment benefits including an extension to the current $300 weekly unemployment benefits, which will now run through September 6.
This is an extension from the previous stimulus bill passed in December, which provided $300 weekly unemployment benefits. However, that program expires this month.
The Pandemic Unemployment Assistance (PUA) program will also extend for contractors and self-employed workers through September 6.
The Pandemic Emergency Unemployment Compensation (PEUC) program, which allows unemployed workers to receive more benefits, also extends to September 6. The PEUC makes the first $10,200 of unemployment benefits non-taxable for those earning $150,000.
The stimulus bill also features other provisions that will contribute to COVID-19 testing, COVID-19 vaccinations, and economic recovery:
- Billions of dollars will speed up contact tracing and COVID-19 testing.
- The bill allocates nearly $40 billion for financial aid grants directed towards higher education.
- Nearly $130 billion will fund schools reopening for K-12. This money will also fund class size reductions, personal protective equipment (PPE) purchases, and ventilation system improvements.
- The stimulus bill allocates $350 billion for cities, states, tribal governments, and U.S. territories.
- The stimulus bill provides over $20 billion for emergency rental assistance. Another $10 billion will provide homeownership and mortgage assistance.
Learn More About Stimulus Bill Developments
As stimulus checks and stimulus provisions continue to disburse, local economies will feel the effects. Small businesses and their employees will also benefit from provisions, keeping businesses open and saving jobs.
The third stimulus bill is the latest measure that will help millions of people, but it may not be the last. Stay updated with 1-800Accountant for any current and future stimulus bill developments.