TSCPA News

House Passes $1.9 Trillion COVID Relief Bill, Biden to Sign by Weekend

March 10, 2021

Today the U.S. House of Representatives passed the $1.9 trillion coronavirus relief bill known as the American Rescue Plan Act. President Joe Biden is expected to sign it before the March 14 deadline to renew unemployment aid programs.

The bill extends the weekly unemployment supplement through Sept. 6, limiting the number of people receiving direct payments and reducing it from $400 to $300. It also makes the first $10,200 in unemployment benefits tax-free in 2020 for households making less than $150,000 per year.

Along with the state and local aid, the bill also puts more money into COVID-19 vaccine distribution and testing, along with K-12 schools and higher education institutions.

The package includes direct payments of up to $1,400 for most Americans. Direct stimulus payment eligibility for the American Rescue Plan is as follows:

Taxpayer stimulus amounts table

Payments are expected to be made in four waves with the first wave for direct deposit recipients hitting before the end of March. Paper check recipients will receive payments by mail during wave two, one week after direct deposits begin. Wave three includes prepaid EIP card recipients one week after live checks are mailed, likely the first week of April.

If a taxpayer is eligible for a direct stimulus payment in any form but fails to receive payment, it could be for one of these reasons:

  • They've moved since filing their last tax return and the IRS does not have their current address.
  • The last time they filed a tax return, they requested a direct deposit. However, they've changed banks since that time, and the IRS does not have their current account information.
  • They are not required to file a tax return.

If a direct stimulus payment isn't received despite eligibility, the funds can be claimed on line 30 of the 2020 tax return - the Recovery Rebate Credit. For those who have already filed a 2020 tax return, an amended return can be filed using IRS Form 1040-X.

If the rebate funds are recovered through the Recovery Rebate Credit, this is considered part of the fourth wave of recipients. The delivery date will depend on when a claim is filed.