On March 11, 2021 President Joe Biden signed into law the American Rescue Plan of 2021.Included in this Act were stimulus payments of $1,400 for most taxpayers, an additional $300 per week for those on unemployment, making the first $10,200 received by taxpayers as unemployment in 2020 to be non-taxable, increasing tax credits for those employers that allow paid medical leave, and another round of PPP loans.
Individuals earning up to $75,000 in annual income, heads of households earning up to $112,500 and couples with incomes up to $150,000 would be eligible for $1,400 in cash payments. Stimulus payments phase out as incomes climb higher. Individuals with annual incomes of $80,000 or more, heads of households earning $120,000 and over and couples with incomes of $160,000 or more would not receive any payment. Eligible dependents, including adult dependents, also would each get $1,400. People receiving Social Security, Supplemental Security Income (SSI), Veterans Administration (VA) and Railroad Retiree benefits would automatically receive the payment, even if they don't normally file tax returns.
The good news is the first $10,200 that most taxpayers received in unemployment benefits of up to $10,200 are not taxable for 2020. If you have already filed your tax return for 2020 the IRS is asking you to not file an amendment, as they will take care of the adjustment for you and send you the difference in tax if applicable.
Tax credits to businesses that offer paid leave to their employees would be extended to Sept. 30. That includes offering family caregivers the same leave available to parents and workers who need to care for themselves. The bill would not require businesses to offer paid leave.
The American Rescue Plan extends eligibility for the PPP to virtually all Section 501(c) organizations other than Section 501(c)(4) social welfare organizations and Section 501(c)(7) social clubs, relaxes the employer-size requirements for larger Section 501(c)(3), 501(c)(6), and 501(c)(19) organizations, and adds $7.25 billion to available PPP funding.