What a Year!
Heading into the middle of March 2021 we are struck by the wild ride that was 2020 and leading into 2021. Of course, this time last year we were writing blogs about such topics as:
- How to Survive a Volatile Stock Market
- The Impact of Coronovirus on Investments
- Delayed Tax Filing Deadlines and
- Summary of the Cares Act
Those were some crazy days, and while we can attest that while most of the sectors of the market made very strong recoveries from the March lows, 2020 was anything but stable for the rest of the year, and then this year started out a bit rough as well…maybe a 2020 hangover of sorts.
But now, this March it seems to be a bit lighter, rather than darkness all around us. Though we as a country and as individuals have had to cope with more than 500,000 individual deaths from Covid or Covid-related illness, the increase in vaccine distribution is one factor beginning to have a positive effect on lowering our corporate levels of fear.
Just like we wrote about the CARES act in late March of 2020, we now can write about the newest stimulus called the American Rescue Plan. Though politicians will eventually debate deficit spending in the future, in the short-term this act once again gets cash hopefully in the hands of individuals who need it the most. In theory, anyway, this will increase spending (or investing) on the part of consumers. All of that is grist for our economy.
How Will I Know if I will Receive a Check?
This act is using several “Checkpoints” to determine whether or not you will receive a check.
- Checkpoint #1: you will receive a direct deposit, check or debit card almost immediately if the Adjusted Gross Income (from your tax return) that is currently on file with the IRS shows your income as:
- Less than $75,000 if you filed as a single individual or
- Less than $150,000 if you filed as a married couple
How Much Will I Receive? If you meet the income guidelines, you will receive $1400 for each dependent in your household. Unusually, this includes your older children if you claim them as a dependent, as well older adults who may also be dependents in your household. For example, a couple with two children will receive $5600. Whether this income information is from 2019 or 2020 is irrelevant at this point, as long as you meet the income requirements that are currently on file with the IRS.
- Checkpoint #2: Many people have yet to file their 2020 Income Tax Return and in many of those cases, income will be less than it was in 2019, meaning you would qualify for the stimulus payments based on your 2020 income. So, the 2nd checkpoint is:
- 90 days after the tax filing deadline, or July 15, 2021
- OR September 1, 2021. This will be the last date you can file your personal tax return and still receive the stimulus credit in 2021.
- However, there is still Checkpoint #3: This third and final checkpoint is for your tax filing deadline in 2022 for your income in 2021, and will also capture any personal tax returns that were filed between September 1 and October 15 of 2021. These will come in the form of Tax Credits against your 2021 income
We will write more about some of the other features and benefits of the American Recovery Act in a separate post, but for now, this will hopefully help some of you to begin thinking about how or when you might qualify for payments.