From the New York Times:

By Ron Lieber and Tara Siegel Bernard

The House of Representatives passed the nearly $1.9 trillion American Rescue Plan on Wednesday, clearing the way for President Biden to sign the pandemic relief package into law.

Here’s what you need to know:


STIMULUS CHECKS
How big are the stimulus payments in the bill, and who is eligible?
The stimulus payments will be $1,400 for most recipients. Those who are eligible will also receive an identical payment for each of their children.

To qualify for the full $1,400, a single person must have an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income must be $112,500 or below, and for married couples filing jointly that number has to be $150,000 or below.

To be eligible for a payment, a person must have a Social Security number.

Is there a partial payment for higher earners?

Yes. But payments phase out quickly as adjusted gross income rises.

For single filers, the checks decrease to zero at $80,000. For heads of household, the cutoff is $120,000. And for joint filers, the checks stop at $160,000.

Payments for children decrease in the same way.

Do college students count as eligible dependents?

College students whom qualifying taxpayers claim as dependents are eligible. (They weren’t for past payments.) The payment goes to the parent taxpayer, not the child.

Do older relatives who live with us count as eligible dependents?

Good news here, too. If claimed as dependents, these relatives are also eligible this time. The payment goes to the qualifying taxpayer, not the dependent adult.

Which year of income determines eligibility?

The most recent year on record at the Internal Revenue Service. If you’ve already filed your taxes this year, it would be 2020. If not, it would be 2019.

What if I receive a stimulus payment based on my 2019 tax return, but the income reported on the 2020 return that I haven’t filed yet will be too high to qualify?

You will not have to return the money.

What if I am newly eligible for a stimulus payment based on my 2020 income, but I haven’t filed my 2020 return?

You could try to file it quickly, in hopes of receiving your payment faster. But there’s no guarantee your return will be processed quickly enough, and haste can lead to errors.

And you don’t have to rush: The bill includes a provision for the Treasury Department to make supplemental payments by September. If you don’t get one then, you can claim the $1,400 when you file your 2021 taxes.

If I have a baby anytime in 2021 and meet the income qualifications, will I get a $1,400 payment for the child, too?

Any baby born in 2021 (or before) is eligible.

When will my payment arrive?
During the last round of payments, the I.R.S. got the first payments out within a few days. As before, you should be able to track the status of your payment via the I.R.S.’s Get My Payment tool. Be aware that the volume of users sometimes overwhelms the site.

What should I do if I still haven’t gotten a payment from a past round of stimulus?

If you were in fact eligible to receive it, you can try to recover it through the so-called Recovery Rebate Credit when filing your 2020 return. Make your claim on Line 30 of Form 1040 or 1040-SR.

UNEMPLOYMENT INSURANCE
How does the stimulus bill affect unemployment payments?

Unemployment payments through multiple federal programs would be extended.
Unemployment payments through multiple federal programs would be extended.Credit...Alex Hecht for The New York Times
If you’re already receiving unemployment benefits, payments will generally be extended for another 25 weeks, until Sept. 6. The weekly supplemental benefit, which is provided on top of your regular benefit, will remain $300 but run through Sept. 6.

Although unemployment benefits are taxable, the bill makes the first $10,200 of benefits tax-free for people with incomes of less than $150,000. This applies to 2020 only.

If I already filed my 2020 taxes, how do I claim that new tax break?

It’s not yet clear, but you may have to file an amended return, according to a Senate aide. The Internal Revenue Service has not issued formal guidance yet. (But here’s hoping they figure out a way to make it happen automatically.)

How do the benefit extensions work?

The extended payments will continue to be delivered through different federal programs, largely based on the type of work you did and for whom.

Benefits through the Pandemic Unemployment Assistance program, which covers the self-employed, gig workers, part-timers and others who are typically ineligible for regular unemployment benefits, will be available for a total of 79 weeks, up from 50, and run through Sept. 6.

And benefits through the Pandemic Emergency Unemployment Compensation program, which essentially extends benefits for people who exhaust their regular state benefits, will be available for a total of 53 weeks, up from 24, also lasting through Sept. 6.

What happens to the supplemental payments?

If you qualify for any benefits, you will also receive the full $300 supplemental payment for weeks ending after March 14 and through Sept. 6. Known as F.P.U.C., it’s called the federal pandemic unemployment compensation.

The bill also extends an extra $100 weekly payment, called the mixed-earner supplement, through Sept. 6. This payment helps people who have a mix of income from both self-employment and wages paid by other employers, because they are often stuck with a lower state-issued benefit based on their (lower) wages.

The bill also clarifies that the $300 federal supplement will not be counted when calculating eligibility for Medicaid and the Children’s Health Insurance Program. The mixed earner supplement, however, will be counted.

Will payments be uninterrupted?

Experts said there may be a gap for beneficiaries in many states because it usually takes a couple of weeks for agencies to program any benefit extensions.

HEALTH INSURANCE
What does the relief bill do about health insurance?
Buying insurance through the program known as COBRA becomes a lot cheaper, but only temporarily.

COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium.

But under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30 for people who have lost a job or had their hours cut.

A person who qualified for new, employer-based health insurance someplace else before Sept. 30 loses their eligibility for the no-cost coverage. And someone who left a job voluntarily is not eligible, either.

Will the cost of health insurance I buy through an exchange be affected?

The bill lowers the cost of health insurance in many instances for people who bought their own coverage via a government exchange. And the premiums for those plans will cost no more than 8.5 percent of your modified adjusted gross income.

These changes will last through the end of 2022 and do not require people to re-enroll to access the lower prices.


How do I sign up for health insurance?

If you don’t already have health insurance but would want it if the price was right, an open enrollment period is already in effect through May 15. You can also switch plans to try to lower the price you’re paying already or get more generous coverage. The Kaiser Family Foundation maintains a calculator that estimates your premiums based on your income and any available government subsidies, and it will be updated once the bill passes.

Are there any changes to health care flexible spending accounts?

None this time, though there were some in the last stimulus bill.

TAXES
What does the bill change about the child and dependent care tax credit?
This credit, which helps working families offset the cost of care for children under 13 and other dependents, will be significantly expanded for a single year. More people are eligible, and many recipients will get a bigger break.

The bill also makes the credit fully refundable, which means you can collect the money as a refund even if your tax bill is zero.

“That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting.

How much is the credit worth?

For this year only, the stimulus legislation makes the credit worth up to $4,000 for one qualifying individual or $8,000 for two or more. The credit will be calculated by taking up to 50 percent of the value of eligible expenses, up to certain limits, depending on your income. (The more you earn, the lower the percentage you can claim.)

Usually, the credit is generally worth between 20 and 35 percent of eligible expenses with a maximum value of $2,100 for two or more qualifying individuals.

The bill also significantly increases the income level at which the credit begins to be reduced. In past years, that started at an adjusted gross income of $15,000, but for this year the full value of the credit will be available to households making up to $125,000.

Previously, the credit was not further reduced below 20 percent, regardless of income, Mr. Luscombe said. But for this year, the bill will begin to reduce the credit below 20 percent for households with income of more than $400,000.

What about dependent care flexible spending accounts?

The bill makes one big change. For 2021 only, you can set aside $10,500 in a dependent care account instead of the normal $5,000. But employers have to allow the change: You can’t adjust the withholdings from your paycheck yourself if your employer declines to provide the option.

How does the bill change the child tax credit?
The credit is more generous for 2021, particularly for low- and middle-income people.

Usually, the credit is worth up to $2,000 per eligible child. This year, it will increase to as much as $3,000 per child ($3,600 for ages 5 and under). The age limit for qualifying children also rises to 17, from 16.

Does it change how the credit works?

Here’s where it gets interesting: You could receive some of the credit as an advance on your 2021 taxes. (You can also opt out of advance payments if you wish.)

The bill makes the credit fully refundable, which means you can receive money from it as a tax refund even if your tax bill is reduced to zero. And half of that money can be advanced to households over the next six months (based on their 2020 tax information, or 2019 if that was unavailable). It’s not clear how frequently payments would be made — perhaps monthly — but under the bill they should begin in July.

The changes are effective for 2021 only, though at least some Democrats would like to make it permanent.

Who is eligible?

Married couples who have modified adjusted gross income up to $150,000 (or heads of household up to $112,500 and single filers up to $75,000) receive the full value of the new benefit.

But after that, the extra amount above the original $2,000 credit — either $1,000 or $1,600 per child — is reduced by $50 for every $1,000 in modified adjusted gross income that exceeds those levels. (For joint filers with one child age 6 to 17, the extra amount will be phased out at about $170,000.)

At that point, the tax credit levels out at $2,000, and is subject to the usual income limits: It begins to phase out when married filers have adjusted gross income of $400,000 ($200,000 for singles).

How do the advance payments work?

The advance payments would total up to half the value of the credit the household is eligible to receive. (The other half would be claimed on its 2021 return.) But exactly how often the payments would be sent out depends on what the Treasury Department decides is feasible.

Here’s how it might work for a couple earning $150,000 or less: With two children, ages 7 and 9, they would be eligible for a $6,000 credit ($3,000 per child). If the payments were made monthly, the family would receive $500 per month starting in July and lasting through the end of the year. The remaining $3,000 would be claimed in 2021 on their tax return.

Could I end up having to pay any of it back?

Conceivably, yes.

A taxpayer may receive too much money from the advance payments in certain situations, such as a change in income or filing status, or if they no longer claim a child as a dependent. (Single parents may run into this situation if the other parent claims the child as a dependent in some tax years.)

This could cause you to owe money at tax time or reduce your refund.

But the bill mitigates the danger in a couple of ways. First, only half of the credit is paid in advance. And the law also says that if the wrong amount was paid because of changes in the number of qualifying children, up to $2,000 per child would not need to be paid back by taxpayers who fall below certain income thresholds: $40,000 for a single taxpayer, $50,000 for a head of household, and $60,000 for joint filers. People whose income is above those thresholds may receive partial protection, which phases out as they earn more, tax experts said.

The bill requires the establishment of an online portal to allow taxpayers to opt out of receiving advance payments and update information about their income, marital status and number of qualifying children.

Will the bill increase the earned-income tax credit?
For 2021 only, the bill will increase for childless households the size of the earned-income tax credit, which helps those at the lower end of the income scale, and make more taxpayers eligible.

The maximum credit amount for childless people increases to $1,502, from $543.

The bill also broadens the age range: People without children will be able to claim the credit beginning at age 19 instead of 25, with the exception of certain full-time students. The upper age limit, 65, will be eliminated.

How would separated spouses be affected?

Married but separated people can be treated as not married for the purpose of the credit if they don’t file a joint tax return.

This applies only if the taxpayer lived with a qualifying child for more than half of the taxable year and didn’t have the same principal home as the spouse at least six months of the year. A separation decree or agreement would also suffice, as long as the individual didn’t live with the spouse by the end of the taxable year.

This change will be permanent.

Are there any other changes?

For the purposes of calculating the credit in the 2021 tax year, taxpayers could choose to use their 2019 income if it was higher than 2021, according to a Senate aide.

People who otherwise would be eligible but whose children do not have Social Security numbers will be permitted to claim the version of the credit available to childless households. This change is permanent.

Taxpayers won’t be disqualified for the credit in 2021 until they have investment income of $10,000, up from $3,650. This change will be permanent, with the $10,000 threshold indexed to inflation.

HOUSING
What does the bill do to help people with housing?

The bill would provide assistance to people in danger of being evicted and to help homeowners avoid foreclosure.
The bill would provide assistance to people in danger of being evicted and to help homeowners avoid foreclosure.Credit...Anna Watts for The New York Times
The bill provides billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes.

Nearly $22 billion will go toward emergency rental assistance. The vast majority of it replenishes the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December.

To receive financial assistance — which could be used for rent, utilities and other housing expenses — households have to meet several conditions. Household income cannot exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic.

Lower-income families that have been unemployed for three months or more will be given priority for assistance.

Is there anything for homeowners?

The bill provides nearly $10 billion to help homeowners struggling with mortgage payments, utility bills and other housing costs.

Roughly $100 million will be dedicated to housing counseling, which will help both homeowners and renters remain in their homes.

How about homeless people?

About $5 billion will be allocated to help the homeless, including the conversion of properties like motels into shelters.

Another $5 billion will be used for emergency housing vouchers to help several groups of people — from the homeless to people at risk of homelessness, including survivors of domestic violence — find stable housing.

STUDENT LOANS
What student loan changes are included in the bill?
There is a big one for people who already have debt.

You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people.

This will be the case for debt forgiven between Jan. 1, 2021, and the end of 2025.

Were paid sick and family leave provisions extended?
The legislation extends through September tax breaks to employers who voluntarily provide their workers with paid sick and family leave if they need to take time off because of the virus. But the bill does not mandate that employers provide the leave — that requirement expired on Dec. 31, and was not renewed in the legislative package signed at the end of last year.

Under the new bill, self-employed people will also continue to receive leave-related tax breaks through September.

The paid leave provisions also cover time taken to receive a Covid-19 vaccine, or to recover from any illness or condition related to the immunization.