COVID-19 Relief: Important Updates You Need to Know

The economy continues to improve, but many families are still struggling financially. Help is available. Some assistance is an extension or expansion of earlier federal COVID-19 relief, while additional aid is part of the new $1.9 trillion American Rescue Plan Act of 2021.

Here are the latest highlights:

Third Round of Stimulus Checks

The American Rescue Plan sent $1,400 per person, including dependents, based on eligibility. This third round of stimulus checks begins phasing out once adjusted gross income (AGI) exceeds $75,000 for individuals and $150,000 for joint filers. The checks are an advance of the 2021 recovery rebate tax credit. If your check is less than your 2021 credit, you can claim the difference on your next tax return.

Child Tax Credit

Temporarily expanded for 2021, this credit is worth $3,600 per child under age 6 and $3,000 for each child age 6 to 17. Half of the money can be received in advance through payments from the IRS from July through December 2021.

The expanded credit starts to phase out once AGI exceeds $75,000 for individuals and $150,000 for joint filers. Those who earn too much to qualify may still be eligible for the usual $2,000 child tax credit that begins phasing out when AGI exceeds $200,000 for individuals and $400,000 for joint filers.

Student Loan Relief

The suspension of payments and interest on federal student loans has been extended through the end of September 2021. Borrowers in income-driven repayment plans won't owe federal taxes on student loan debt that's forgiven in 2021 through 2025.

Housing Aid

A moratorium on foreclosures for homeowners with federally guaranteed mortgages has been extended through June 30, 2021. The deadline for homeowners to request a forbearance, or a pause, in mortgage payments has also been moved to the end of June. Homeowners who received a forbearance on or before June 30, 2020, can seek an additional six months of suspended payments. States will receive nearly $21.6 billion to provide rental and utility assistance to those who have lost their jobs or seen a reduction in income.

Jobless Benefits

Federal jobless benefits of $300 per week — paid on top of state unemployment benefits — have been extended through Sept. 6, 2021. Meanwhile, each taxpayer can exclude up to $10,200 in unemployment benefits received in 2020 from federal taxes. This tax break is available only to households with less than $150,000 in modified AGI. (The tax deadline has been extended to May 17, 2021, to file a 2020 return.)

Health Care Assistance

If you no longer have employer-based health insurance because you were laid off or your hours were cut in the past year, your COBRA premiums will be fully covered from April 2021 through the end of September 2021. 

What's more, the Affordable Care Act's premium subsidies have been increased, making more people with higher incomes eligible for them. These changes, retroactive to January 2021, remain in effect through 2022. To get an estimate of premiums with the subsidy changes, use the updated Health Insurance Marketplace Calculator from the nonprofit Kaiser Family Foundation. Also, check out our Retiree Health Cost Estimator if you'd like to calculate what your health care costs may be during retirement.

Please note: The contents of this publication provided by MissionSquare Retirement is general information regarding your retirement benefits. It is not intended to provide you with or substitute for specific legal, tax, or investment advice. You may want to consult with your legal, tax, or investment advisor to review your own personal situation. Some of the products, services, or funds detailed in this publication may not be available in your plan. This document may contain information obtained from outside sources and it may reference external websites. While we believe this information to be reliable, we cannot guarantee its complete accuracy. In addition, rules and laws can change frequently.

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