The American Rescue Plan of 2021 passed Congress on Wednesday and was signed by President Joe Biden on Thursday, meaning that for most Americans, a few windfalls are on the way. Here’s a timeline of what you can expect, based on what we know so far:
Stimulus checks: They’re coming ASAP, and they will be $1,400 for most people. White House press secretary Jen Psaki says the first direct deposit payments will be sent out as soon as this weekend. The IRS Get My Payment Tool has not yet been updated to include your payment amount and timeline; in the meantime, here’s a calculator.
Cheaper health insurance: The stimulus bill greatly increases subsidies for a variety of people. Obamacare is in an open enrollment period until May 15, and you are allowed to switch plans if a cheaper or better option is available. Here is a calculator to help you figure out if you should be shopping around. If you have been laid off, know that the government is picking up the tab for premiums on COBRA—the program that allows people to buy their former employers’ health insurance—until September 30.
Unemployment: For most people, the bill extends current unemployment payments from March 14 through September 6. However, it may take a few weeks for states to update their systems accordingly, so expect a possible gap in payments. (You will eventually receive checks that retroactively date back to March 14.) People already receiving unemployment will also receive a $300 weekly supplemental payment (it’s called “federal pandemic unemployment compensation”) for the same dates.
Monthly child tax credits: These $250–$300-per-month payments for children under age 18 will likely begin now, delivered as a direct deposit or check. The Treasury has not yet released final details on how often these payments will be sent out, nor when they will begin. Note that these will be advance payments on your 2021 taxes; you will likely be able to opt out of advance payments. Child-related tax benefits are confusing—here’s our guide to what you’ll be getting.
Spring 2022 Tax Season Refunds
These payments must be claimed on 2021 tax returns:
- Parents: The January to June child tax credits, and the child care tax credit—up to $8,000 for two kids—will be refunded in full, even if your tax liability is zero. (For example, if you owe $0 in taxes, but tally $6,000 in child-related tax credits, you’ll receive a $6,000 payment.)
- Non-parents: The earned-income tax credit is up to $1,502 (from $543), and available to people (non-students) ages 19 and up who live in childless households (it was previously limited to people ages 25–65).
2021–2025 Tax Benefits
- Student loan holders: Those who qualify for loan forgiveness or cancellation through 2025 will not need to pay income taxes on the forgiven debt. This is a huge win, and mostly impacts loan holders on income-dependent payment plans.