The passage of a second stimulus bill in 2020 in response to the global coronavirus pandemic was considered historic; with a third stimulus comes what some feel to be the most ambitious relief package yet. Approved by the Senate but passed strictly along party lines, the measure passed to the House of Representatives to be voted on–but getting there wasn’t easy (see below).
The House voted to approve the stimulus on Wednesday March 10, 2021 and the bill went to President Joe Biden’s desk to be signed into law. Some expected that signature to come on Friday, March 12, but the President took action to sign the third stimulus into law a day earlier than expected. This was a move some interpreted as a commitment to the urgent nature of the economic relief passed.
Among the details of the stimulus bill signed into law comes a provision that taxpayers will NOT be taxed on stimulus payments (amounts and requirements are listed below) as they are not considered taxable income.
Stimulus check amounts are based on the taxpayer’s 2019 or 2020 tax returns depending on when your 2020 tax information becomes available. If the IRS has no tax return for 2020 on file when the checks are cut the amounts are determined for that individual taxpayer based on the 2019 tax return. Consult a tax professional about your questions about how stimulus payments affect your tax filing for the current year.
The Road To Third Stimulus Approval
One point of contention with the contents of the $1.9 trillion stimulus? A proposed increase in the minimum wage to $15 an hour.
While GOP senators and representatives cried foul, proponents of the add-on to the bill were forced to choose between getting the COVID-19 relief out the door and to the President’s desk or trying to push the minimum wage issue as an integral part of the legislation.
The minimum wage hike did not survive as part of the stimulus bill. Neither did a proposal to eliminate between $10k and $50k of student loan debt. Those issues will be addressed separately or as part of other legislation not associated with the relief package.
What IS included?
Contents Of The 2021 $1.9 Trillion Third Stimulus Package
- $160 billion for a nationwide vaccination program
- Federal jobless benefits continue at $300 per week until September 2021
- Federal child tax credit for qualifying families for up to $3,600 per child under six. Families with children under 17 would qualify for $3,000 per child, and families can get $500 for each 17 or 18 year old dependent and for full-time college students 19 through 24 years old
- Extension of an eviction and foreclosure moratorium to September 2021
- Money to help schools reopen
- Funding for state/local governments (including tribal governments)
- A $1400 stimulus check for qualifying households and individuals
What You Need To Know About Third-Round $1,400 Stimulus Checks
What most want to know about with all of this third-round stimulus news is obviously the fate of the $1400 stimulus checks promised as part of this legislation. After much back-and-forth, the version passed by the House and Senate includes:
- $1400 for each qualifying person.
- Targeted stimulus payments for those meeting income caps per person/household.
- Stricter income rules mean a partial payment could replace a full $1400 check, some won’t get any check at all.
- Those who owe taxes to the IRS may not receive a stimulus check.
Third-Round Stimulus Check Rules
The full $1400 is available for single taxpayers who earn less than $75,000. The income caps for single taxpayers as “head of household” is $112,500 and married earners who bring in $150,000 or less.
Disqualifications occur at the following levels:
- $80,000 for single earners
- $120,000 head of household earners
- $160,000 for married earners
Previous Stimulus Efforts
On December 27, 2020, President Trump passed the long-awaited followup to that legislation; a $900 billion stimulus bill that includes specific measures intended to help military members as well as larger relief in the form of more stimulus checks for most Americans. In March 2020, the $2 trillion CARES Act was approved by Congress and was the first effort to help Americans and American businesses affected by the global COVID-19 pandemic.
This second round of payments will be distributed automatically, with no action required for eligible individuals. If additional legislation is enacted to provide for an increased amount, Economic Impact Payments that have been issued will be topped up as quickly as possible.
Those who do not get a second stimulus check by January 15, 2021 must claim the missing check via tax returns in 2021 using something called the Recovery Rebate Credit. This is also the avenue those who did not get the first round of stimulus should use to claim any funds they are owed.
Details Of The December 2020 Stimulus Bill
The legislation is said to be the longest submitted in 2020; more than five thousand, five hundred pages worth approved in the Senate with a 92-6 vote; in the House of Representatives the legislation was passed on a 359-53 vote.
The massive bill, which included a $1.4 trillion federal funding package, includes the following measures:
- Direct payment stimulus checks of up to $600 per adult (see below)
- Extended time for federal employees to repay suspended Social Security taxes (see below)
- $696 billion overall in DoD non-emergency discretionary funds
- $116 million to upgrade DoD child care facilities
- $284 million for on-base education
- $1.5 billion for DoD environmental restoration programs
- More than $284 billion for forgivable Paycheck Protection Program loans
- $15 billion “in dedicated funding for live venues, independent movie theaters, and cultural institutions” also known in some circles as the Save Our Stages Act
- $300 in weekly enhanced unemployment insurance benefits (see below)
- $25 billion for rental assistance (see below)
- Eviction moratorium extension (see below)
- $82 billion for education providers for safe reopening
- $10 billion in child care assistance
- $13 billion in increased Supplemental Nutrition Assistance Program, other benefits
- Additional funding earmarked for coronavirus vaccine distribution and related issues
- 1% Federal Pay Raise
Stimulus Funding For Small Business
While not specifically aimed at veterans, the $325 billion set aside for small businesses affected by the pandemic would be a boon for any veteran-owned business. This small business bailout money is only expected to help qualifying businesses cover some three months worth of payroll expenses, while the current situation is likely to impede “normal” operations for six more months.
Some veterans will also benefit from the Save Our Stages funding included in this small business measure which is intended to provide relief for live venues and related businesses negatively affected by the pandemic.
Under the December 2020 stimulus bill, businesses (veteran-owned and otherwise) may deduct expenses associated with forgiven PPP loans, and there is an employee “retention credit” offered to prevent businesses from having to initiate a round of layoffs. There is also a two-year tax break for business meals and there’s an extension of the payroll tax subsidy offered to employers who gave their workers paid sick leave.
Stimulus Funding To Prevent Medical Bill “Sticker Shock”
The December 2020 stimulus includes language offering protection for patients (veterans, dependents, civilians, etc.) from getting surprise medical bills from out-of-network care, emergency care, etc.
Stimulus Money For Limited Student Loan Forgiveness
Not everyone who took out student loans is affected by the December 2020 stimulus plan to forgive more than a billion in federal loans to historically Black colleges and universities. Not all veterans, currently serving military members, or family members will benefit from this measure, but those who do could find significant relief.
How The December 2020 Stimulus Bill Affects Military Members And Military Families
There is much relief for military members and military families, both directly and indirectly. The direct payment stimulus checks of up to $600 per adult are offered with qualifying income caps:
- Military members, veterans, and civilians earning up to $75,000 qualify for the full $600
- The limit is $112,500 when filing as head of household
- The limit is $150,000 as a married couple filing jointly
- $600 per qualifying child is also offered.
Those who earn more than the caps will have their benefit reduced by $5 per every $100 of income over the limit.
This is all based on the citizen’s adjusted gross income as reported on their 2019 tax returns. It is highly likely that anyone who received a stimulus check the first time around would, if still eligible, receive the second stimulus in the same manner it was delivered originally.
There are a large number of variables that may affect that issue and it is highly recommended that anyone who has moved, experienced a PCS move, or has otherwise changed addresses in 2020 make sure their current physical mailing address is still up to date.
Extended Repayment Time Offered To Federal Employees And Military
As part of early coronavirus economic relief efforts, suspended Social Security payments were offered for federal employees and those serving in the military. Civilian employees were also offered the ability to accept this tax “holiday”.
This was contested in some circles for two reasons: the money would eventually have to be paid and would negatively affect federal and military incomes later when a lump sum collection or short-term collection period began. The OTHER reason for the resistance to this plan? The President and Commander-in-Chief offering to forgive those payments–IF he won the 2019 election.
Prior to the December 2020 stimulus bill, the 6.2% Social Security tax (which was not withheld starting in September 2020 after a Presidential executive order) the money would have been withheld from military and federal paychecks between January 2021 and March 2021. Thanks to the stimulus, that collection period has been extended to the end of 2021.
Pandemic Unemployment Funding
Military members might not have to worry about where their next paychecks are coming from, and ditto for federal employees not threatened by furloughs, layoffs, etc. But what about those who are, and military family members who have lost jobs during the pandemic?
Eligible applicants may qualify for a $300 weekly federal enhancement in benefits for 11 weeks– through March 14, 2021. This is half of the amount of the first such benefit offered earlier. The stimulus extends pandemic unemployment measures created by the CARES Act in March. Such measures affect more than 10 million Americans.
Eviction Moratorium Extended
The Federal Register notes the original eviction moratorium established by the Centers For Disease Control, an order issued under Section 361 of the Public Health Service Act, has an original effective date ending on December 31, 2020.
But the stimulus bill extends the moratorium by one month, making it good until the end of January 2021. There was also some $25 billion set aside in the bill for rental assistance.
Those who have government-backed mortgages who are trying to avoid foreclosure have an existing foreclosure moratorium that can help (not part of the stimulus package) but those who are renters may find the new eviction deadline adjustment to be very helpful in terms of getting through the end of 2020 without having to look for a new place to live over the holidays.
Pandemic Rental Assistance
While not aimed specifically at military families, veterans, or dependents, this portion of the stimulus can be a big help for those struggling financially during the pandemic. At the start of December 2020, CNBC quotes a Center on Budget and Policy Priorities figure of more than 12 million “adult renters” acknowledging they are behind on their rent payments.
Active duty troops drawing BAH might not feel the pinch as badly as their civilian co-workers; veterans and school-age dependent children will definitely feel it should they get behind on those rent payments.
Enter the rental assistance portion of the stimulus bill, which is designed to provide funds from the U.S. Treasury via the Coronavirus Relief Fund to individual state governments who in turn disburse the funds to state or area relief agencies.
The speed this relief becomes available to the average family depends greatly on the infrastructure which may exist already in the case of states such as New York and California, but states that need to set up or further enhance such infrastructure such as Missouri or Alabama (according to CNBC) may experience longer processing times for such relief.
Individual renters would be required to apply for rental assistance through their designated state or local agencies. To qualify, an individual household may have to meet income limits (you may not exceed more than 80 percent of the area median income) and a requirement that applicants must qualify for unemployment benefits and/or have experienced direct pandemic-related economic hardship.
More SNAP Funding
The $13 billion increase in Supplemental Nutrition Assistance Program (SNAP) funding and other benefits might not seem to some to be a direct benefit for veterans and military members, but the statistics suggest otherwise.
According to data published by the Center on Budget and Policy Priorities, more than one million American veterans live in households that “participate in SNAP”, which is the program many refer to generically as “food stamps”.
And there is a large number of active duty military who must rely on SNAP; a 2013 Census Bureau report includes data on approximately 23,000 active-duty service members who rely on SNAP benefits.
Under the new stimulus bill, SNAP benefits may increase for eligible applicants by 15% for six months. Eligibility rules for the program are unchanged.
A Word About Childcare Funds
Many parents, especially those in military families, may have gotten excited about certain portions of the December 2020 Stimulus Bill addressing child care–one of the most reported-on provisions of the legislation in this area involves $10 billion in funding for child care. But that money is largely set aside for the industry itself.
A large portion will go toward the Child Care & Development Block Grant program which is for child-care providers.
This may be of interest to military spouses or working-age dependent children who work in the military child care system but for parents looking for financial relief for childcare, this part of the stimulus bill isn’t what they are looking for.
The stimulus bill does provide $116 million to upgrade DoD child care facilities, but like the funding mentioned above, this is not for families.
Over time as the funds are applied military families will experience the benefit of improved facilities, but this is not a stimulus for parents. It’s intended for infrastructure and other “service provider-level” issues.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
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