{"id":22516,"date":"2021-03-16T08:00:34","date_gmt":"2021-03-16T13:00:34","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=22516"},"modified":"2021-03-16T17:36:30","modified_gmt":"2021-03-16T22:36:30","slug":"american-rescue-plan-what-does-the-third-stimulus-mean-for-your-clients","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/american-rescue-plan-what-does-the-third-stimulus-mean-for-your-clients\/","title":{"rendered":"American Rescue Plan: What does the third stimulus mean for your clients?"},"content":{"rendered":"

A third round of stimulus checks is on the way for millions.<\/p>\n

The American Rescue Plan Act of 2021, a new COVID-19<\/a> relief bill, was signed into law on March 11, 2021. The bill includes a third round of stimulus payments for millions of Americans. We know these funds are important to your clients, and we are here to help.<\/p>\n

If your clients are eligible, they could get up to $1,400 in stimulus checks for each taxpayer in their family, plus an additional $1,400 per dependent. This means a family with two children could receive $5,600.<\/p>\n

The IRS began issuing the first batch of stimulus payments, and they could have arrived as early as this last weekend (March 13-14), with more arriving over the coming week. Further batches of payments will arrive during the following weeks. If your clients are eligible, have them check the status of their stimulus payment and the way it\u2019ll be sent to them by going to the IRS Get My Payment Tool<\/a>, which will be live on March 15.<\/p>\n

Who would be\u00a0eligible for the third stimulus check?<\/b><\/p>\n

Families earning less than $150,000 a year and individuals earning less than $75,000 a year should get the full $1,400 per person. Families earning up to $160,000 per year and individuals earning up to $80,000 per year will receive prorated stimulus checks for less than $1,400 max.<\/p>\n

Unlike the previous two rounds, your clients will receive stimulus payments for all their dependents, including adult dependents and college students.<\/p>\n

How much is the third stimulus check?<\/strong><\/p>\n

If your clients are eligible, they could get up to $1,400 in stimulus payments for each taxpayer in their family plus an additional $1,400 per dependent. That means that a family of four with two children could receive up to $5,600.<\/p>\n

Remember, just because your clients are eligible, does not mean they are eligible for the full $1,400.<\/p>\n

How will my clients get their third stimulus check?<\/strong><\/p>\n

Your clients don\u2019t need to do anything to get their stimulus check. The IRS will determine eligibility based on their last tax return, either 2019 or 2020, and will likely send their payment to the bank account where their tax refund was deposited.<\/p>\n

When will my clients get their third stimulus check?<\/strong><\/p>\n

The IRS has begun distributing stimulus payments. The first batch of stimulus payments could have arrived as early as last weekend (March 13-14), with more arriving over the coming week. Further batches of payments will arrive during the following weeks.<\/p>\n

For information on when your clients can expect your stimulus payment, have them check the IRS Get My Payment tool<\/a>, which will be live starting March 15.<\/p>\n

Can my clients change or update their bank information?<\/strong><\/p>\n

Right now, there is no way for your clients to change their information for their stimulus check. The payment will be based on the information from their latest tax return, and will go to the bank account or address the IRS has on file for them.<\/p>\n

Will the stimulus affect my clients’ taxes for this year, or next year?<\/strong><\/p>\n

None of the three stimulus checks (or Recovery Rebate Credits) are considered income, and therefore aren\u2019t taxable. They won\u2019t reduce your client’s refund, or increase what they owe when they file their taxes this year or next year. They also won\u2019t affect your clients eligibility for any federal government assistance or benefits.<\/p>\n

Here is other information you need to know for your clients:<\/p>\n

Expanded unemployment and retroactive tax relief.\u00a0<\/b>Unemployment payments will increase by $300 per week and the benefits will be extended through Sept. 6, 2021.<\/p>\n

The bill extends the Pandemic Unemployment Assistance (PUA), which expands unemployment to those who are not usually eligible for regular unemployment insurance benefits. This means that self-employed, freelancers, and side giggers will continue to be eligible for unemployment benefits.<\/p>\n

The bill also makes the first $10,200 of unemployment income tax-free for households with income less than $150,000. This provision would be retroactive to tax year 2020 (the taxes you file in 2021).<\/p>\n

Expansion of credits for children of workers.\u00a0<\/b>The American Rescue Plan also includes an expansion of tax credits for lower-income workers with kids.\u00a0<\/span><\/p>\n

Enhanced Earned Income Tax Credit.\u00a0<\/b>Beginning next year, the Federal Earned Income Tax Credit has been expanded for workers without kids and nearly triples the maximum credit. Eligibility is also extended for a wider range of filers, now allowing taxpayers to qualify who are over 65 or between the ages of 19-25.<\/p>\n

Expanded Child Tax Credit.\u00a0<\/b>Beginning in tax year 2021, the Child Tax Credit will be expanded. The bill increases the amount that families claiming the Child Tax Credit receive from $2,000 to:<\/p>\n