By: Loren Anthes, Fellow, William C. and Elizabeth M. Treuhaft Chair for Health Planning
Tara Britton, Director of Public Policy and Advocacy, Edward D. and Dorothy E. Lynde Fellow
Emily Campbell, Associate Director, Senior Fellow, Williamson Family Fellow for Applied Research
Hope Lane, Public Policy & External Affairs Associate
On March 11, the American Rescue Plan Act of 2021 was signed into law and builds upon previously aid measures enacted in 2020. Included in the act are a third round of direct stimulus payments. These will help millions of families who have been impacted by COVID-19 and the associated economic downturn, while buoying the economy. Included in the 242-page bill are many other key provisions that will help Ohio and Ohioans reduce hardship and begin to set the stage for a stronger and more equitable recovery.
Below are some quick answers to common questions about the legislation.
Stimulus payments
The provisions in the Rescue Plan that have gotten the most attention are the direct payments to Americans.
When will I get my check?
Updated March 18, 2021. Direct deposits of stimulus funds allocated through the American Rescue Plan started appearing in bank accounts on March 17, The IRS also mailed out an additional 150,000 checks with a pay date of March 19. [1]
The short answer is soon. A widely-reported portion of this legislation is “Recovery Refunds” or direct stimulus payments to taxpayers of up to $1,400 per person. The legislation requires the Secretary of the Treasury to provide the payments “as rapidly as possible.” Since this is the third round of payments, the IRS now has experience distributing them to Americans, and the legislation specifically mentions using electronic fund transfers. In December, payments rolled out within days of enactment.
How can I figure out if I should expect a payment?
Updated March 18, 2021. The IRS launched a tool where you can check the status of your economic impact payment. Check it out here.
Eligibility for payments is based on the latest information the IRS has on file about your household. If you already filed your 2020 taxes, they’ll use 2020 Adjusted Gross Income (AGI). If not, it will be based on AGI from 2019.
This time there is a very narrow income phase-out. Individuals earning less than $75,000 and joint filers with AGI below $150,000 will receive the full amount, above that it begins to phase out, and those whose AGI is above $80,000, or $160,000 for joint filers, do not qualify.
The advance payments and child tax credit expansion could mean the difference between paying rent or being evicted, or between buying food and going hungry.
Individual tax filers with AGI below $75,000 will receive $1,400 for themselves, plus $1,400 for each dependent they claim on their taxes. Joint filers, such as couples, with incomes below $150,000 will receive $2,800 ($1,400 x 2) plus $1,400 per dependent. Therefore, a family of four with a household income below $150,000 would get $5,600.
There are other income rules for heads of household which may apply to some situations. But they are complicated. There are several refund estimation tools available online.
I got a check in the first round, but not in the second round. Will I get one in the third round?
The three pieces of legislation have three different income levels used to calculate eligibility. While single filers who earn below $75,000 AGI will receive the full amount under all three rounds of individual stimulus payments, the phase out amount and the ceiling differ. The first round phased out completely for individual filers with AGI less than $99,000, the second was $87,000, and the third is $80,000 AGI.
Eligibility calculations were also based on different years. Since there was a tax filing deadline extension in 2020, some people had not filed their 2019 taxes before the first payments went out, so their stimulus payment was based on 2018 AGI.
If you thought you qualified for a payment during the second round in December and January and didn’t receive one…in January, President Joe Biden signed an executive order directing the Treasury Department to provide payments to Americans who qualified for the second round of payments but didn’t get them.
The American Rescue Plan makes some complex changes to qualifications for direct stimulus payments which means some groups who were excluded from previous rounds of stimulus payments may get checks this time. This includes college students or their parents, people with disabilities, those who entered the workforce for the first time in 2020, and some older adults.
If you thought you qualified for a payment during the second round in December and January and didn’t receive one – don’t fear! In January, President Joe Biden signed an executive order directing the Treasury Department to provide payments to the estimated eight million Americans who qualified for the second round of payments but didn’t get them. Because of an unusual glitch, people who filed their 2019 taxes using TurboTax may have encountered issues. When you file your 2020 taxes, if it turns out that you did qualify, the payment should lower your tax bill or result in a larger refund. It’s called a “recovery rebate.”
How do I make sure the IRS has my bank information?
Visit www.irs.gov and click “Get Coronavirus Tax Relief.” Beware of scams. The IRS will never ask you to pay a fee to update your information. Be wary about unsolicited calls or emails offering to check your information. And be certain to read the fine print on any refund anticipation loan offers or stimulus check advances.
The safest way to update your information is to use your home internet network (not a public Wi-Fi network) open your browser, and type in www.irs.gov.
Won’t these payments cause inflation?
Maybe. But probably not. Despite two rounds of stimulus payments last year, the amount that Americans paid for goods and services last year barely budged. In December, the Consumer Price Index showed just a 1.4 percent increase. Instead, many analysts say that federal action in 2020 acted as intended – it stimulated economic activity and prevented the COVID economic downturn from being even worse. Unemployment remains well above pre-pandemic levels, and many Americans, especially working mothers, are leaving the labor force all together. As we’ve written before, the economy recovery may be K-shaped, where the impact of the COVID recession isn’t broadly shared. Some families are doing really well, while others are struggling. As many as two-thirds of Ohioans used at least some of their stimulus payments last year to pay for basic necessities, like food or utilities. In short, the economic stimulus in the American Rescue Plan meets the “Three Ts” economists use to evaluate stimulus: it is Timely, Temporary and Targeted.
Tax credits
Will my family start getting $300 per month because we have children?
The child tax credit isn’t new, but the American Recovery Plan temporarily expands it. Right now, enhancements are only in place for 2021, but many advocates hope that they will be made permanent in later legislation. It is estimated that up to 95 percent of Ohio’s children will benefit from these improvements.
There are three main changes. First, the maximum credit is increased from $1,000 per year per child to $3,600 per child for children ages five and under, and $3,000 per year for children ages six to 17. Second, it includes children who are 17-years-old for the full credit. Previously the full credit only applied to children ages 16 and younger. Finally, the legislation sets up a mechanism for families to receive an “advance payment” of the Child Tax Credit and provides an appropriation of $397.2 million for those payments. Certain low-income families will receive their estimated annual credit in monthly or quarterly installments, rather than having to wait to get as a tax refund when they file their taxes.
It is estimated that up to 95 percent of Ohio’s children will benefit from these improvements.
The increases begin to phase out at $150,000 for married couples, $112,500 for heads of household, and $75,000 for other parents. Many working families already received the existing child tax credit, so these improvements will reduce their tax bills when tax year 2021 filings happen a year from now. A smaller number of poor and low-income families will begin to receive the monthly payments for the second half of 2021 starting as early as July. The first six months of the credit will be paid as a tax refund when these families file their 2021 taxes.
For families living month-to-month, the advance payments and child tax credit expansion could mean the difference between paying rent or being evicted, or between buying food and going hungry. Ohio has the poorest large city in the United States (Cleveland) and is the only state with more than one city on the list of the 10 poorest (Cincinnati is sixth). Since the families of so many Ohio children are struggling, our state stands to benefit more than many others from these changes. We will write much more about the impact of these changes in the coming weeks.
Is there any help to pay for child care?
In addition to the child tax credit changes, working families with children may also benefit from temporary enhancements to the dependent care tax credit. Before, this credit allowed families to “write off” as much as 35 percent of child care expenses up to $3,000 for one child and $6,000 for two or more dependents. That credit will now increase to a max of $8,000 for one dependent and $16,000 for two or more children. It also allows families to count up to 50 percent of their child care expenses. These benefits phase out for households with AGI of more than $400,000. The credit is also made fully refundable, meaning that lower-income families will receive the credit as a tax refund, even if the amount of credit exceeds their tax bill.
The legislation also increases the ceiling for employer-provided dependent care assistance from $5,000 to $10,500 per year.
I don’t have children. Are there any tax changes that impact me?
Yes. The legislation makes some changes to the Earned Income Tax Credit (EITC) specifically targeted for adults without children. It increases the maximum amount of EITC for adults without children from $543 to $1,502. The age restrictions on the credit are largely eliminated, so millions of American may qualify for EITC for the first time. Previously, childless workers only qualified for EITC if they were between the ages of 25 and 64. Childless workers between the ages of 19 and 24 are included for the first time, and the upper age limit was eliminated.
Assistance for families
Is there additional assistance for families who are low-income?
Yes, the Rescue Plan includes $1 billion in Pandemic Emergency Assistance. These funds will be allocated to states based upon the number of children receiving basic assistance or other nonrecurrent benefits, like those in the Temporary Assistance for Needy Families (TANF) program and the amounts spent by states on programs within TANF.
Is my unemployment check going to stay the same?
Probably. This legislation continues the additional $300 per week unemployment benefits through September 6. It also makes the first $10,200 in unemployment payments nontaxable for households with incomes below $150,000.
The Rescue Plan ensures there is automatic coverage for vaccines with no co-payments by individuals enrolled in the program.
Medicaid
Within the American Rescue Plan are several Medicaid provisions which support vaccine access, extend eligibility for mothers who have recently given birth and support state financing for the uninsured and underinsured.
Will my vaccine(s) be covered?
As enrollment in Medicaid continues to increase and states are rolling out their strategies for deploying the vaccines, the Rescue Plan ensures there is automatic coverage for vaccines with no co-payments by individuals enrolled in the program. This means all 3,136,587 Ohioans who have Medicaid will be able to receive a vaccine without any direct expense. What’s more, the federal government would reimburse states at 100 percent of the cost and states have the option to provide coverage for the vaccine to the uninsured without any direct expense as well.
What happens if I’m pregnant?
For five years, states would have the option for extend Medicaid coverage for pregnant and postpartum individuals for up to one year after delivery. Currently, Ohio only extends coverage for 60 days after birth. With the evidence that 12-month postpartum coverage significantly improves maternal health outcomes, this enables Ohio to cover the 751,906 women of reproductive age in Medicaid if and when they deliver.
I lost my insurance, but marketplace plans are too expensive. Does the Rescue Plan fix that?
In addition to providing states additional money to enhance federal funds to states which have not yet expanded Medicaid, the Rescue Plan would reduce the cost of marketplace coverage for all subsidy-eligible individuals and families by increasing premium tax credit subsidies. As a result of the Rescue Plan, individuals making between 100 and 150 percent of the federal poverty level (FPL) would not pay anything in marketplace premiums and eligibility for the tax credit subsidies would expand to include more individuals. Currently, there are more than 760,000 Ohioans without any source of coverage, including 103,815 Ohioans who earn between 100 and 149 percent of the FPL, whose uninsured rate is 11.3 percent compared to the statewide rate of 6.6 percent.
What about the opioid use disorder epidemic, nursing homes, rural health care, drug costs and home-based services?
The legislation includes new funding for several other health programs. For example, there is $3.5 billion for block grants to address behavioral health including $100 million for workforce training, $15 million for states to develop mobile crisis services with enhanced federal funding for awardees, and $80 million for pediatric mental health services. Another $900 million is included for skilled nursing facilities, supporting quality improvement, and to protect against COVID-19 and assist with outbreaks.
The health care infrastructure will be supported with $500 million in grant funding.
Starting 2024, the elimination of the Medicaid drug rebate cap, which has the potential for significant cost savings for states.
Finally, the American Rescue Plan includes a 10-percentage point increase in federal matching dollars for Home and Community Based Services (HCBS). Using 2017 numbers, where Ohio spent over $5 billion on HCBS, this change could represent a more than $517 million dollar difference to support Ohio’s efforts to promote home and community-based options.
Food
The American Rescue Plan Act retains and expands many food assistance provisions, including those in the Supplemental Nutrition Assistance Program (SNAP) from previous COVID-19 relief packages, to help address continued high levels of hunger and hardship.
I am a current SNAP recipient receiving an increased monthly benefit. How long should I expect that to continue?
The second relief package, passed in December 2020, provided funds to ensure that all SNAP participants receive a 15 percent increase in their monthly benefits. This increase, which is equivalent to about $27 per month per person, was set to lapse in June but is now extended through September 30. As of December 2020, 1.5 million Ohioans in 750,000 households received SNAP benefits.
The Pandemic-EBT benefit has been a tremendous help for my household as my child(ren) fluctuate between remote, in-person and hybrid learning. Does this benefit end when school breaks for the summer?
Congress created the Pandemic-EBT (P-EBT) program in March 2020 to ensure low-income children would not miss out on free and reduced-priced meals they had previously received at school. Since then, more than 870,000 Ohio children have benefited from the program which was set to lapse at the end of the 2020-2021 school year. Access to the program will now be available for the duration of the public health emergency, including the summer, to allow families with children who would receive school meals to continue purchasing healthy food more easily during the pandemic.
Are there any changes to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)?
Yes! The importance of modernizing the WIC program was highlighted early in the pandemic when there were shortages of many WIC-eligible foods at grocery stores across the country. While administrative waivers were quick to adjust approved foods for WIC families, the benefit amount remained unaffected. The passage of the Rescue Plan provides $880 million to the program, to increase the amount of the cash-value vouchers to up to $35 through September 30 and to increase participation in the program through outreach and innovation.
What about senior nutrition, food banks, online purchasing, the food supply chain and shelters?
Similar to health programs, the American Recovery Plan Act includes funding which is targeted to other hunger-reduction programs. This includes $37 million allocated for senior nutrition through the Commodity Supplemental Food Program which serves low-income people age 60 and older, and $1.15 billion to states for SNAP administration, including funds to invest in technological improvements to expand access to SNAP-online purchasing.
The legislation also directs the United States Department of Agriculture (USDA) reimburse emergency shelters under the National School Lunch Program for meals provided to individuals younger than age 25 who receive services there. It increases food available for distribution through food banks to help feed families in need, while also supporting farmers by purchasing their products. Additional investments support infrastructure for retooling support for food processors; farmers markets; food banks and local food systems; and producers to build resiliency in the food supply chain long term.
Housing
Millions of adults remain behind on rent and mortgage payments and are at great risk of eviction and foreclosure due to lost income. Within the American Rescue Plan Act are several provisions to try to mitigate homelessness. Homelessness not only exacerbates the spread of COVID-19, it would also make economic recovery for families who must start from scratch, nearly impossible.
What does this mean for emergency rental assistance?
The legislation provides $27.4 billion in emergency rental assistance for low-income renters who have lost income or are experiencing other hardships and risk losing their housing. This includes $5 billion allocated for emergency Housing Choice Vouchers for people recovering from homelessness or who are at-risk of homelessness. There is an additional $5 billion for homelessness assistance.
What about for homeowners?
Assistance for people who own their homes is provided through $9.96 billion in the Homeowner Assistance Fund to help avoid foreclosure, $5 billion for utility assistance, and $120 million for housing counseling and fair housing activities.
Mental health and substance use disorders
What does the Rescue Plan do to support mental health?
The bill includes several provisions that seek to support mental health providers, as well as advance the wellbeing of health care workers and first responders in the midst of the pandemic. Several provisions also focus on the impact of the public health emergency on a community’s wellbeing, including the children in a community.
Specifically, the following funding is provided for behavioral health:
- $1.5 billion for community mental health services
- $80 million for mental health and substance use disorder (SUD) training for health care professionals, paraprofessionals and public safety officers, with consideration given to rural and underserved areas to reduce and address suicide, burnout, mental health conditions and SUD among health care professionals
- $20 million for a nationwide campaign directed at health professionals and first responders aimed to prevent mental health and SUD. The funds also are intended to encourage seeking help when needed and provide help in identifying risk factors
- $40 million to promote mental health for health care professionals in rural and underserved areas
- $50 million to address community behavioral health needs worsened by the public health emergency
- $10 million for the National Child Traumatic Stress Network to address violence related stress
- $30 million for Project Aware to improve wellness and resiliency in education
- $20 million for youth suicide prevention
- $100 million for behavioral health workforce education and training needs
- $80 million for pediatric mental health care access
- $420 million for certified community behavioral health centers
How does the Rescue Plan address the ongoing crisis of substance use disorders?
The Rescue Plan also provides funding to address SUD. In the midst of the COVID-19 pandemic, the country is still dealing with a crisis related to opioid use. In addition to the funding described above, this bill will bring support to address SUD through $1.5 billion for block grants to prevent and treat SUD and $30 million for community-based overdose prevention services, syringe service programs and other harm reduction services used for controlling and preventing infectious diseases and connecting people with services.
https://www.washingtonpost.com/business/2021/03/16/irs-stimulus-payment-tracker/
