President Joe biden is preparing to sign its $ 1.9 trillion relief plan, which will impact Americans financially through stimulus checks, tax reforms and unemployment benefits.
It is the second largest economic aid program in US history, after the CARES (Coronavirus Aid, Relief and Economic Security) law. Biden’s signing will trigger the delivery of $ 1,400 stimulus checks, an extension of unemployment benefits through September and a tax-free remission of student loans.
Saturday, Senate adopted the House-led package with a number of amendments, which sent it back to the House for approval. It passed Wednesday, with almost all Democrats and no Republicans vote in favor of it. Only one Democrat, Representative Jared Golden of Maine, opposed it.
“My vote today should not be interpreted as reluctance to support my constituents and the economy during this pandemic. homeowners, federal unemployment assistance and small business support, ”Golden said in a statement.
The third round of stimulus checks could hit people’s bank accounts next week, according to House Majority Whip James Clyburn, and the White House hopes “many” Americans will receive payments by the end of the month.
While the US bailout offers higher payouts than either of the first two rounds, it limits who gets them. Individuals with adjusted gross income of $ 75,000 and joint filers with income less than $ 150,000 will receive the full payment of $ 1,400 and $ 2,800 respectively. However, the reduced payments will now be completely eliminated for people earning over $ 80,000 and joint filers earning over $ 160,000.
The CARES Act completely eliminated benefits for people earning over $ 99,000 and joint filers with incomes over $ 198,000. Accelerating the phase-out of payments could reduce the millions of people who received the first two payments of the third round.
As part of the US bailout, unemployed Americans can receive weekly unemployment benefits of $ 300 until September 6. House Democrats initially set the allowance at $ 400, but Senate negotiations, largely fueled by the West Virginia senator Joe manchin, a moderate Democrat, resulted in an amendment that brought payments down to the current level of $ 300, which was set to expire on March 14.
Another provision added by the Senate was to waive tax on the first $ 10,200 a person receives in unemployment income if they earn less than $ 150,000 in adjusted gross income in 2020. Unemployment benefits are taxable and the expanded benefits enacted during the CARES Act have raised concerns that people who are still unemployed could be hit with a hefty tax bill if they did not choose to withhold 10% of their benefits to cover federal tax. to pay.
By giving people a tax break on the first $ 10,200 they earn in unemployment income, Congress hopes to alleviate some of this tax burden.
As the president comes under pressure to cancel student loans amid the pandemic, this stimulus package will not do it. However, this will make the student loan exemption tax free.
About 45 million people have student loans in the United States and some of those people have income-based repayment plans that allow them to make payments based on a percentage of their discretionary income. After 20 or 25 years, the remaining debt is written off and the canceled loans are treated as income. This can generate a hefty tax bill of several thousand dollars. However, the Student Loan Tax Relief Act, which is part of the relief program, would temporarily end the taxation of canceled student loans.
As part of the US bailout, the cessation of taxation of canceled student loans will continue until 2025, but it leaves open the possibility of extending it beyond that date.
In January, Biden extended the hiatus on federal student loan payments until at least October. His decree also maintained abstention on the accumulation of interest.