Assistance for American Families and Workers

Economic Impact Payments

The Treasury Department, the Bureau of the Fiscal Service, and the Internal Revenue Service (IRS) have provided three rounds of fast and direct relief payments during the COVID-19 crisis. Payments from the third round continue to be disbursed rapidly to Americans across the country.

Starting in March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided Economic Impact Payments of up to $1,200 per adult for eligible individuals and $500 per qualifying child under age 17.  The payments were reduced for individuals with adjusted gross income (AGI) greater than $75,000 ($150,000 for married couples filing a joint return).  For a family of four, these Economic Impact Payments provided up to $3,400 of direct financial relief.


The COVID-related Tax Relief Act of 2020, enacted in late December 2020, authorized additional payments of up to $600 per adult for eligible individuals and up to $600 for each qualifying child under age 17.  The AGI thresholds at which the payments began to be reduced were identical to those under the CARES Act.


The American Rescue Plan Act of 2021 (American Rescue Plan), enacted in early March 2021, provided Economic Impact Payments of up to $1,400 for eligible individuals or $2,800 for married couples filing jointly, plus $1,400 for each qualifying dependent, including adult dependents.

  • For this third round of Economic Impact Payments, the American Rescue Plan requires an additional “plus-up” payment, which is based on information (such as a recently filed 2020 tax return) that the IRS receives after making the initial payment to the eligible individual.
  • In addition, the American Rescue Plan increases direct financial relief to American families by providing $1,400 payments for all qualifying dependents of a family, rather than just qualifying children under age 17.

 

Normally, a taxpayer will qualify for the full amount of Economic Impact Payment if they have AGI of up to $75,000 for singles and married persons filing a separate return, up to $112,500 for heads of household, and up to $150,000 for married couples filing joint returns and surviving spouses.  Payment amounts are reduced for eligible individuals with AGI above those levels.


The Treasury Department and the IRS continue to expand outreach to millions of homeless, rural poor, and other disadvantaged Americans to ensure that they receive Economic Impact Payments. This includes new and continued relationships with homeless shelters, legal aid clinics, and providing Economic Impact Payment information in more than 35 languages.
 

Check the Status of Your Economic Impact Payment

Related Benefits and Credits

Unemployment Compensation

Across the nation, millions of Americans lost their jobs in the wake of the COVID-19 pandemic and, as a result, claimed unemployment benefits. The American Rescue Plan extended employment assistance, starting in March 2021.


In addition, the American Rescue Plan waives federal income taxes on the first $10,200 of unemployment benefits received in 2020 by individuals with adjusted gross incomes less than $150,000. The tax relief extends to both workers who received benefits through federal unemployment programs as well as those who received traditional benefits through their state unemployment insurance fund. This law will provide tax relief for Americans who lost their jobs and utilized unemployment benefits last year – allowing millions of workers to focus their benefits on covering essentials during the COVID-19 pandemic.

 

Child Tax Credit

The American Rescue Plan’s expansion of the Child Tax Credit will substantially reduce child poverty by (1) supplementing the earnings of families receiving the tax credit, and (2) making the credit available to a significant number of new families. Specifically, the Child Tax Credit has been revised in the following ways for 2021:

  • The credit amount has been increased. The American Rescue Plan increased the amount of the Child Tax Credit from $2,000 to $3,600 for qualifying children under age 6, and $3,000 for other qualifying children under age 18.
  • The credit is now fully refundable. By making the Child Tax Credit fully refundable, low- income households will be entitled to receive the full credit benefit, as significantly expanded and increased by the American Rescue Plan.
  • The credit’s scope has been expanded.  The American Rescue Plan allowed 17-year-olds to qualify for the Child Tax Credit. Previously, only children 16 and younger qualified.
  • Eligible taxpayers will receive advance payments of half of their estimated 2021 Child Tax Credit amounts during 2021. This change will allow struggling families to receive financial assistance now, rather than waiting until the 2022 tax filing season to receive the Child Tax Credit benefit.  The IRS and the Bureau of the Fiscal Service will make these advance payments to eligible taxpayers on a periodic basis from July through December 2021.
  • The IRS is constructing an online portal for taxpayers to update relevant data, such change of address or bank account information, for mid-year payment adjustments.  The portal will be available at IRS.gov in the future.

 

In addition, the American Rescue Plan has extended the full Child Tax Credit permanently to Puerto Rico and the U.S. Territories. For the first time, low- income families residing in Puerto Rico and the U.S. Territories will receive this vital financial assistance to better support their children’s development and health and educational attainment.