The U.S. Senate and House of Representatives have passed a $900 billion COVID-19 relief bill that provides $600 stimulus payments to individuals, adds $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses. The Consolidated Appropriations Act, 2021 is the largest bill ever passed by Congress at over 5,500 pages. Here are some of the key tax provisions in the legislation:
Direct Payments to Individuals
The Act authorizes direct payments to individuals called an advance tax credit in the amount of $600 per individual taxpayer ($1,200 for married filing jointly) and $600 per qualifying child. The advance tax credit is phased out based on the 2019 adjusted gross income (AGI) beginning at an AGI of $150,000 in the case of a joint return, $112,500 in the case of head of household and $75,000 for all other taxpayers. The payments are expected to be made during the first few weeks of January, but no later than September 30, 2021.
Workers receiving unemployment benefits will receive a $300 per week supplement from Dec. 26 until March 14, 2021. This bill also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others in nontraditional employment, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.