Journal of Accountancy ~ A $1.9 trillion U.S. coronavirus relief package took a step forward Saturday when the Senate voted 50–49 to approve a bill that will be sent back to the House of Representatives because the Senate changed the legislation originally approved by the House.
Known as the American Rescue Plan Act, H.R. 1319, the bill will be sent to President Joe Biden’s desk to be signed into law if it passes the House without changes. Congress is under pressure to get Biden’s signature on the bill before legislation authorizing $300 a week in federal funds added to unemployment checks expires on March 14.
The Senate bill retains most of the tax provisions in the House bill unchanged. However, under the Senate bill eligibility for the recovery rebate credits (to be paid to most taxpayers in advance as economic impact payments) would phase out more quickly than it did in the two previous rounds.
For single taxpayers, the phaseout will begin at an adjusted gross income (AGI) of $75,000 and the credit will be completely phased out for taxpayers with an AGI over $80,000. For married taxpayers who file jointly, the phaseout will begin at an AGI of $150,000 and end at AGI of $160,000. And for heads of households, the phaseout will begin at an AGI of $112,500 and be complete at AGI of $120,000.
Under the House bill, the phaseout range was $25,000 for single taxpayers (i.e., from AGI of $75,000 to AGI of $100,000), $50,000 for joint filers, and $37,500 for heads of household.
The Senate bill also:
- Provides $300 a week in federal unemployment benefits through Sept. 6 and makes the first $10,200 in unemployment benefits tax-free in 2020 for households making less than $150,000 per year.
- Does not raise the federal minimum wage, which the House bill would have increased to $15 per hour.
- Will not include funding for a bridge to Canada in upstate New York over the St. Lawrence seaway, or the extension of a railway system near San Francisco. Funding for both projects was included in the House bill.
- Specifies that gross income does not include any amount that would otherwise be included in income due to the discharge of any student loan after Dec. 31, 2020, and before Jan. 1, 2026.
The legislation will provide funding for state, local, and Tribal governments; K-12 schools and colleges and universities; COVID-19 testing and support of the vaccine rollout; and small businesses.