Rebate Payments and Enhanced Unemployment Benefits

While the new Act contains many provisions to help small businesses, individuals also get relief in the form of another round of rebate payments and enhanced unemployment benefits. Here are the details:

Rebate Payments

In an effort to help stimulate the economy, the Act provides an additional 2020 refundable credit of $600 for single taxpayers, $1,200 for married filing joint taxpayers, plus a$600 credit for each qualifying dependent child under the age of 17. The rebates are subject to phase-out thresholds based on 2019 income beginning at $150,000 of adjusted gross income (AGI) for joint filers and surviving spouses, $112,500 of AGI for heads of household, and $75,000 of AGI for single taxpayers. The credit is phased out at $5 for each $100 of income over these threshold amounts.

The rebates are a 2020 refundable credit, paid as soon as possible based on income reported on 2019 income tax returns. If a taxpayer’s 2019 income is high enough to phase out the rebate, but his/her actual2020 income is lower, the difference will be added as a credit when the taxpayer files his/her 2020 tax return. However, taxpayers whose 2019 income was low enough to qualify for a rebate, but whose 2020income would have resulted in a phase out, will not have to repay the difference. The Treasury Secretary made the refunds via direct deposit, with payments made by January 15, 2021.

Enhanced Unemployment Benefits

The Act provides $286 billion for enhanced unemployment benefits:

Enhanced federal unemployment insurance is reinstated, providing an additional $300 per week(down from the $600 subsidy that expired in July 2020) for 11weeks, through March 14, 2021.

The Pandemic Unemployment Assistance (PUA) program is extended through March 14,2021, which provides unemployment assistance to the self-employed, independent contractors, gig workers, low-wage individuals, and individuals with a limited work history.

The Pandemic Emergency Unemployment Compensation (PEUC) program is extended through March 14, 2021, providing 11additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.

The maximum number of weeks an individual can claim benefits through state unemployment plus emergency federal programs was increased to a total of 50 weeks.

Workers who have not exhausted the time for PUA/PEUC benefits on March 14, 2021 are entitled to a transition period for an additional three weeks of benefits, through April 5, 2021.

The Act also confirms that shared work plans qualify as unemployment benefits for purposes of the $300 subsidy payment.

If you would like more information or to discuss your financial concerns