On Thursday, President Joe Biden signed the third stimulus package into law since the start of the Covid-19 pandemic. The $1.9 trillion bill known as the American Rescue Plan Act “is a force for fairness and justice in America,” according to House Speaker Nancy Pelosi. The American Rescue Plan Act includes stimulus checks, an expansion of the child tax credit, extended unemployment benefits, small business support and funds allocated for further vaccine distribution.
Let’s begin with a high level breakdown of the $1.9 trillion bill. According to the Wall Street Journal, The American Rescue Plan Act will be allocated as follows:
The largest allocation of funds in the bill are earmarked for the next phase of stimulus checks. Individuals earning less than $75,000 and couples earning less than $150,000 will be fully eligible for checks of $1,400 per individual or $2,800 per married couple.
In order to know if you qualify for a stimulus check, you must first know your Adjusted Gross Income or AGI. An example of how AGI is calculated can be found below.
Add: Total Income
Subtract: Certain Deductions (known as above-the-line deductions)
Equals: Adjusted Gross Income (AGI)
For those of you not willing to calculate it yourself (I don’t blame you!), refer to line 8b of your 2019 tax form 1040 or line 11 of your 2020 tax form 1040 if you’ve already filed. If you can’t locate your tax return, then use this calculator to estimate your stimulus check amount.
The third iteration of coronavirus related aid is the largest yet. If you’d like to better understand how the bill impacts your personal situation such as knowing what to do with your stimulus check or what the increase in child tax credit means for your household please contact us to schedule a free consultation.
Disclaimer: This article is for informational purposes only and is not a recommendation of Fyooz Financial Planning, Natalie Slagle CFP®, or Daniel Slagle CFP®. Past performance may not be indicative of future results and may have been impacted by events and economic conditions that will not prevail in the future. Therefore, it should not be assumed that future performance of any specific security, investment product or investment strategy referenced in the article, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s). No portion of the article shall be construed as a solicitation to buy or sell any specific security or investment product or to engage in any particular investment or financial planning strategy. Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products, which otherwise have the effect of reducing the performance of an actual investment portfolio.