The new stimulus (American Rescue Plan), explained.

That’s right, there’s money on the table!
Hi all!
As I’m sure you’ve heard, a new stimulus package has been approved!
There’s a lot to unpack here, so I’m going to do my best to break this down into super pertinent chunks.
Here we go!
What it is
Congress passed a $1.9 trillion relief bill called the American Rescue Plan (ARP). It will provide financial support for families as well as myriad tax relief programs and more.
There’s a lot to it, but for the purposes of this email, we’re going to stick to how it relates to you and your taxes. For more information, you can check out the IRS webpage.

What it means for individuals
Stimulus Payments
The largest portion of the ARP is the third round of stimulus payments. There are a few key differences this time around:
- The maximum payment for individuals is $1,400.
- Some people may see the stimulus deposited into their bank account as early as this weekend.
- If you have not yet filed your 2020 taxes, it’s ok. They will continue to use your most recent tax return as a basis for the payment.
- All dependents are now eligible for stimulus payments. Previously, if you had a child over age 16, that dependent didn’t receive a stimulus.
- The income range of individuals who will receive a stimulus is significantly smaller than before.
- If you earned $75,000 or less as a single filer or $150,000 or less as a joint filer, you will receive the full stimulus.
- If you earned more than $80,000 as a single filer, or more than $160,000 filing jointly, you will not receive a stimulus check.
- You can calculate your stimulus here
Two things to note here:
- If you have a child under age 17, you typically receive a Child Tax Credit of $2,000 on your taxes. The ARP is extending that to $3,600 per child under age 6, and $3,000 per child ages 6-17. Dependents age 18 and up will remain a $500 credit. This change is for 2021, so there is nothing you need to do for this year’s taxes.
- The IRS will pay out half of the Child Tax Credit monthly starting in July. If you qualify, you will receive $300 per child under age 6 or $250 per child starting in July. To qualify, you must have earned less than $75,000 last year if you’re single, or $150,000 if you filed taxes jointly.
- There is a catch, though: If you earn more than the stimulus threshold in 2021, this income will be rescinded when you file your 2021 taxes.
The ARP has a clause in it that stimulus payments will be paid out in two phases this time around. In Phase 1, the IRS will take all of the data that it already has and pay stimulus payments out based on that. If you haven’t filed a 2019 or 2020 tax return, you won’t get a stimulus payment. For anyone who earned less in 2020 than in 2019 and has not filed a tax return yet, there will be a second date in which the IRS pays out to everyone who should have received more stimulus/a bigger stimulus based on their 2020 filing. That date is going to be the earlier of 90 days after tax deadline day OR September 1.
We can probably expect payments to start going out as soon as next week.
Unemployment Benefits
The ARP allows for the first $10,200 in unemployment benefits as non-taxable, but only for people who made less than $150,000 in 2020. Anyone who has already filed their tax return and was on unemployment in 2020 will likely need to amend their tax return to recoup these taxes but we aren’t totally sure about this yet. Unfortunately, the timing on this is going to take a while. The IRS is going to have to write regulations on this, implement it into the tax code, get the information out to the tax software companies, and then the software companies are going to have to implement those changes on their end. This means we will need to hold off filing your tax return until these changes are in place, and possibly means that we will need to file an extension for you.
April 15th filing deadline
So far, the IRS has been adamant about not extending the normal April 15th filing deadline. However, I strongly believe the deadline will once again be extended as it was last year. We don’t know that for sure but it’s hard to imagine the IRS not giving us some grace that is badly, badly needed. And, if the IRS decides to change the April 15th deadline, it’s going to be up to your individual state whether their tax deadline is going to be extended as well. Most states pushed back their filing deadlines to coincide with the July 15th deadline, but a handful of states did not.

What’s up with the PPP?
The PPP program is receiving a bit more money, which means that there is still money to be claimed! If you have not yet applied for this round of the PPP, please reach out to your lender ASAP to get started. Funding takes 2-3 weeks after you have applied, and they will stop funding loans on March 31st.
There is a ton of pressure from a lot of organizations to extend the PPP program beyond March 31st. Still, I would highly recommend getting your application started now if you have not already. US Bank, Blue Vine, and Citizens Bank of Edmond (that last one seems super random but it’s highly recommended in the #TaxTwitter universe for excellent service!).
For those of you waiting for more information about PPP forgiveness: TBD. I personally have received emails from US Bank indicating that they will begin accepting applications later this month, and will email an invitation with a link to apply when it’s your time. I imagine other lenders will have a similar process in place to avoid having all PPP recipients attempt to apply for forgiveness at the same time.

Yay for stimulus, nay for all the paperwork at tax time
What isn’t in the ARP?
Two big things didn’t make the final bill:
1. Raising the minimum wage to $15/hr – although this is still in play for future legislation this year
2. Student loans aren’t being forgiven – yet. Hidden in the depths of the ARP is a cluase that any future student loan debt that is forgiven will not be subject to income tax. That’s a crucial paragraph – so if legislation passes in the future canceling X dollars in student loan debt, it will not be considered taxable income (and thus potentially saving a LOT of tax dollars!).
One more thing
We understand that you might have a bunch of questions about this bill.
Heck, WE still have a lot of questions about the bill. However, we’re in the throes of tax season and are up against Monday’s business filing deadline.
If you reply to this email with questions, please know that it may take 2-3 business days for us to respond.

Keep on keepin’ on!