March 15, 2021
$1.9 Trillion COVID-19 Federal Relief Analysis
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March 15, 2021 (Washington, D.C.) -- On March 11, President Joe Biden signed into law the American Rescue Plan, a $1.9 trillion pandemic assistance relief package. This law is part of a package that President Biden unveiled in January to provide more direct payments to Americans and give more assistance to those who remain at risk a year into the COVID-19 pandemic. This latest federal assistance provides the largest stimulus check yet for most Americans; it also provides tax credits for children, reduces tax liability for forgiven student loans, and provides funding for reopening schools. If more COVID-19 relief bills are signed into law, we will continue to provide information--including a detailed follow-up analysis on the specifics surrounding this bill and small businesses.
Below is a high-level summary of what the new stimulus bill means for you and your family here in the United States.
Impact on Citizenship
Immigrants should be aware that obtaining federally funded benefits, apart from those provided under the American Rescue Plan, CARES Act
, or previously passed Families First Coronavirus Response Act
, could impact future visa and citizenship applications. U.S. Citizenship and Immigration Services (USCIS) previously released a factsheet on the Public Charge Rule and issued this statement
On February 2, President Biden took action
to remove limitations on public charge rules enacted by President Trump. President Biden’s Executive Order directing the U.S. Department of Homeland Security
(DHS) to remove the requirement that family sponsors repay the government if relatives receive public benefits is on hold due to legal challenges. As a result, we continue to encourage any non-U.S. citizen seeking government assistance to speak with an attorney specializing in immigration law and/or public assistance programs who can advise you about what programs you may be eligible for and to what extent receiving these benefits may impact your immigration status.
Additional Stimulus Checks to Households
Direct payments of up to $1,400 per person will be sent to many Americans. Individuals making less than $75,000 a year in adjusted gross income and married couples making less than $150,000 a year in adjusted gross income should receive full payments. Payments will be reduced on a sliding scale for individuals who earn up to $80,000 a year and for married couples earning up to $160,000. Every family member with a social security number (including lawful permanent residents) is qualified for an additional payment. Payments will not be denied to citizens married to someone without a social security number. Unlike previous COVID-19 relief, households will receive an additional $1,400 for each dependent. This includes college students and other qualified dependent adults who are claimed on their most recent tax filings. Furthermore, households will become eligible for an additional $1,400 payment for every child born in 2021.
Similar to the last round of stimulus checks, most individuals will not need to apply to receive payment. The Internal Revenue Service (IRS) will determine income eligibility based on the tax returns filed in 2019 or 2020. If the IRS has your direct deposit information, you will receive a payment that way. If it does not, you will receive your payment as a check or debit card in the mail. Payments are expected to be disbursed by the end of March with direct deposits or mailed checks. The IRS has created an online tool that can track payments through the “Get My Payment”
The most recent tax filing with the IRS will determine income eligibility. If you are eligible but don’t receive your check for any reason, you can claim the payment when you file your 2020 taxes. Rebate checks do not need to be repaid. If you experienced income loss in 2020 or have an increase in family size, filing your 2020 tax return immediately may not guarantee that the return will be processed quickly enough to receive your check by the end of this month. You do not have to rush to file your taxes, as the Treasury Department can make payments until September. The IRS has not yet issued formal guidance to assist individuals that have already filed their 2020 taxes and experienced a reduction of income in 2021. If you do not get this latest stimulus check by September, you have the option of claiming your $1,400 credit when filing your 2021 taxes.
If you believe you are eligible for previous payments but did not receive any or some of the prior rounds of payments, you will have the opportunity to claim so on your 2020 tax forms with the Recovery Rebate Credit
Unemployment Benefits Changes
There is now a $300 per week federal supplement to jobless benefits until September 6. Contact your state’s unemployment office
for additional information about eligibility and filing requirements should you need it. There may be a gap in payments as many states may need a few weeks to implement the benefit extensions.
Unemployment insurance payments are not generally taken into consideration
by the DHS for purposes of making a public charge determination for those looking to complete visa and citizenship applications.
Continued Food Assistance
Food stamp recipients continue to receive the 15% increase in benefits until September (originally set to expire in June). To learn if you qualify and want to apply for benefits, you must contact your state’s local office
Additional funding of $5 billion is being provided to assist children who would have received free or reduced-price meals. The Pandemic-EBT (P-EBT) program gives children benefits to purchase food while schools are closed due to the pandemic. Children qualify for P-EBT if they would have ordinarily obtained free or reduced-priced meals under the National School Lunch Act and their school is closed or operating with reduced hours or attendance for at least 5 consecutive days. Families whose children’s schools are closed may be able to receive P-EBT benefits if their state
operates the program. The P-EBT benefits may also be available for the summer as well for participating states.
For Americans struggling to pay rent, there will also be continued assistance. There is $20 billion in emergency rental assistance for state and local governments to assist low-income households with rent, utilities, and other housing expenses. Another $10 billion is being allocated for mortgage and homeownership assistance as well. However, this legislation does not
extend the nationwide eviction moratorium that expires at the end of this month.
To qualify for this financial assistance, the household must 1) not exceed 80 percent of the area median income, 2) have one household member at risk of homelessness or housing instability, and 3) qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) as a result of the pandemic. Low-income families who have been unemployed for at least three months will be given priority assistance. For more information on how to obtain state and local assistance, visit the National Low Income Housing Coalition
More Tax Credits
Individuals that received unemployment assistance in 2020 will now have the first $10,200 in unemployment assistance tax-free for 2020. Married couples who file jointly and have unemployment insurance will be given a waiver of unemployment assistance income taxes of $20,400 if their combined adjusted gross income is less than $150,000. The IRS has not yet issued formal guidance on whether individuals that have filed their 2020 taxes will need to file an amended return.
The Child Tax Credit will increase from $2,000 to $3,600 for children up to 5 years old and increase to $3,000 for children ages 6 to 17. The full $3,000 child tax credit is available to individuals who declare an adjusted gross income up to $75,000 and couples reporting and adjusted gross income up to $150,000. For incomes beyond this amount, the credit will be reduced by $50 for every additional $1,000 of adjusted gross income earned. Individuals earning up to $200,000 and married couples filing jointly with earnings of $400,000 can claim $2,000 per child with the tax credit.
The payments will be paid out monthly and the enhanced credit will become fully refundable if your tax bill is zero so that more low-income parents can take advantage of it. Households with no income can also claim the credit. The IRS could start providing periodic payments of $250 for school-aged children as early as July 2021, depending on what the Treasury Department determines is workable.
Additionally, the Child and Dependent Tax Credit will be expanded to allow some families to claim up to half of their child care expenses for children under 13 and other dependents. This credit can also become fully refundable if your tax bill is zero. The relief package will also enhance the Earned Income Tax Credit (EITC) for workers without children by nearly tripling the maximum credit from $543 to $1,502 and extending eligibility depending on income and filing status. Individuals age 19 to 65 are eligible, with the exception of certain full-time students. Those whose children do not have social security numbers will be permitted to claim the EITC available to childless households.
For 2021 only, individuals can now also set aside $10,500 for dependent care accounts instead of $5,000 if the employer allows the change.
Student Loan Changes
Federal law usually treats forgiven debt as taxable income, however, the new assistance will remove taxes on forgiven student loan debt through 2025. This tax waiver would include taxes on full or partial discharge of student loan debt. This waiver would apply to all federal student loans, and also includes state education loans, institutional loans, private student loans, and private parent loans. This latest change would give President Biden the option of forgiving student debt through executive action without burdening thousands of Americans with a new tax bill.
Small Business Assistance
There is now also a $25 billion grant program specifically for bars and restaurants. Eligible businesses and any affiliated businesses (such as a restaurant group) can receive up to $10 million and can use the money for a variety of expenses, including payroll, mortgage and rent, utilities, maintenance (including outdoor seating construction), supplies, PPE, cleaning materials, and food and beverages. A maximum of $5 million can be awarded per physical location of an eligible entity. The eligibility amount will be determined based on pandemic-related revenue loss.
The Paycheck Protection Program (PPP) will also get an additional $7.25 billion in federal assistance to provide forgivable low-interest loans to more nonprofit organizations (including gurdwaras) than ever before. The Small Business Administration (SBA) is administering the PPP loans and is taking loan applications until March 31 to assist businesses and nonprofits (including gurdwaras) on a first come, first serve basis. Businesses and nonprofits that previously obtained a PPP loan may also be eligible for a Second Draw PPP loan. You can read more about the latest changes to the PPP forgivable low-interest loans by reading the Sikh Coalition’s previous analysis
Small business owners and nonprofits (including gurdwaras) can also take advantage of $15 billion in the Emergency Injury Disaster Loan Program (EIDL). The EIDL will give priority to severely impacted businesses with less than 10 employees. The EIDL is a federal long-term, low-interest loan from the SBA. EIDL funds can be used for working capital and normal operating expenses (healthcare benefits, rent, utilities, fixed debt payments, and payroll). EIDL loans do not require payments for the first year as it is deferred, however, interest will continue to accrue.
The loan terms are fixed interest of 3.75% for businesses and 2.75% for nonprofits (including gurdwaras) for 30 years. There is no prepayment penalty or fees, and the loan can be used for working capital and normal operating expenses. Collateral is required for loans over $25,000. Unlike the PPP, the EIDL is not forgivable. Previously, advances up to $10,000 were forgivable--however, those advance funds have been fully allocated and are not currently available as of this writing. It is recommended that business owners apply for the EIDL with the SBA as soon as possible to get additional information, as loans are processed on a first-come, first-serve basis. To apply for an EDIL loan, visit the SBA’s website
There is also now $15 billion for operators of theaters, museums, concerts, and other venues that were forced to close due to pandemic. The American Rescue Plan now allows those businesses to apply for both a PPP loan and obtain a grant through the Shuttered Venue Operators Grant program
. Grants will be given to these venues in an amount equal to 45% of their 2019 gross earned revenue or $10 million, whichever is less. For an eligible venue that began business after January 1, 2019, grants will be for the average monthly gross earned revenue for each full month they were in operation during 2019 multiplied by six or $10 million, whichever is less. The SBA is in the process of setting up this grant program and is not yet accepting applications. Those who have suffered the greatest economic loss will be given priority. To learn more, you can visit the SBA’s Frequently Asked Questions page for the Shuttered Venue Operators Grants program
If you need additional information about financial assistance available to your business or nonprofit, you can search for a local assistance partner
through the SBA. These partners can help guide you through federal, state, and local assistance programs.
Increased Vaccine Access
COVID-19 vaccine distribution and testing will receive $160 billion in new funding. The new program is intended to help set up community vaccination sites across the country and eliminate vaccine shortages. Finally, the American Rescue Plan also provides funding for vaccine production and distribution.
The Department of Health and Human Services has stated that it would not require anyone to provide personal information such as a driver’s license, passport, or other documentation to prove citizenship in order to obtain a vaccine. For purposes of making a public charge determination for those looking to complete visa and citizenship applications, the U.S. Citizenship and Immigration Services (USCIS) announced
that the agency will not consider “testing, treatment, nor preventative care (including vaccines) related to COVID-19” as part of a public charge determination. USCIS is encouraging anyone with symptoms that resemble COVID-19 (e.g., fever, cough, shortness of breath) to get the necessary medical treatment and preventive services. However, if you or somebody you know is a non-U.S. citizen and you have concerns about the vaccination process, we encourage you to speak with an attorney specializing in immigration law and/or public assistance programs who can advise you.
Health Insurance Assistance
More Americans will now qualify for federal subsidies under the Affordable Care Act for the next two years with $34.2 billion in additional funding. Enrollees would pay no more than 8.5% of their income towards coverage, which was previously closer to 10% of income. Insurance subsidies are determined based on the federal poverty rate—individuals earning between $51,520 and $106,000 for a family of four would qualify. Lower-income enrollees could have their premiums eliminated completely, and those collecting unemployment benefits could sign up for coverage with no premiums in 2021. These changes will be effective immediately and last through the end of 2022; they would not require anyone to re-enroll to access the lower prices. If you don’t already have health insurance, an open enrollment period
is in effect through May 15.
Buying insurance through the government program known as COBRA will also temporarily become cheaper. COBRA generally lets someone who loses a job buy coverage from their former employer. Normally a person may have to pay at least 102% of the cost of the premium. Under the new law, the government would pay the entire insurance premium through September 2021. However, the insurance premium coverage from the government could end earlier than September if the person qualified for new, employer-based health insurance.
The latest relief also provides $130 billion to schools and colleges to help them re-open. The money would be used to modify classrooms to allow more social distancing, install ventilation systems, hire more custodial staff, and buy personal protective equipment. The money can also be used to increase the hiring of nurses and counselors and to provide summer school.
The Sikh Coalition will continue to provide additional information and resources
as the federal government enacts additional assistance that can help individuals, businesses, and gurdwaras impacted by COVID-19. We are also providing resources on the COVID-19 vaccines for the Sikh American community which can be viewed here
As always, the Sikh Coalition urges you to practice your faith fearlessly.