Bank like a financial pro with the Alliant mobile app. Make payments, deposit checks, manage cards and so much more.
Renovate your kitchen, pay off high-interest debt, or have access to emergency funds when you need it with an Alliant Home Equity Line of Credit.
Browse new and used vehicle inventory, and qualify for a rate discount when you buy!81
Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
Discover how an award-winning banking experience could be your next little win.
Logo courtesy of CNBC
By Pam Leibfried
The American Rescue Plan Act was signed into law last week. The $1.9 trillion law includes billions of dollars in aid to cities, states, small businesses and the travel industry to mitigate the economic impact of the pandemic and to help schools and hospitals cope with the pandemic.
Our focus in this article, however, is on a few of the key financial and tax provisions of the law that may have a more direct impact on your family’s personal finances. The act includes a third round of stimulus checks, increased unemployment benefits, expanded healthcare premium subsidies, and the expansion of child and dependent care credits.
Many of you have already received your third Economic Impact Payment (EIP3) stimulus check via direct deposit. If you haven’t yet received yours, you can check the status of your third payment by using the Get My Payment tool on the IRS website at IRS.gov.
Amount of your stimulus. Most Americans will receive a $1,400 stimulus payment for themselves and $1,400 for each qualifying dependent without having to take any action. However, payments are reduced for those with an adjusted gross income (AGI) of $75,000-$80,000 for individuals and $150,000-$160,000 for couples. Individuals making over $80,000 and couples making over $160,000 do not qualify for this round of stimulus payments. If you’ve already filed your 2020 income taxes, your 2020 AGI will be used for this calculation, but if you have yet to file your 2020 return, your 2019 AGI will be used.
Direct deposit. Most of you will receive your third Economic Impact Payment (EIP3) stimulus check via direct deposit, using the account the IRS has on file from your last tax return or the information you provided using the IRS’ non-filers tool last year. These direct deposits often show up as a pending transaction a day or two before the funds are released to your financial institution and thus made available to you.
Debit cards and checks. Those who do not use direct deposit for their tax refunds or federal benefits will receive payments via check or debit card. Most should be issued in the next few weeks. The IRS encourages those expecting to receive a payment card to watch their mail closely. The Economic Impact Payment Card, or EIP Card, will come in a white envelope that prominently displays the U.S. Department of the Treasury seal. The EIP card shows the Visa name on the front and the issuing bank, MetaBank N.A. on the back. More information about these cards is available at EIPcard.com.
Social Security and other federal beneficiaries. If you are on Social Security and don’t usually file an income tax return or you receive other federal income benefits such as Supplemental Security Income or Veteran benefits, your payment date has not yet been announced. You should expect to receive your third benefit payment the same way you receive your regular benefits – via direct deposit, check or debit card.
Dependents. Unlike the previous stimulus payments that did not make stimulus payments to dependents over the age of 17, the EIP3 stimulus does not have an age cutoff for dependent payments. Families will get a payment based on all of the qualifying dependents they claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents.
For healthcare purchased using the Marketplaces created by the 2009 Affordable Care Act, subsidies are being increased for 2021 and 2022. These subsidies will lower premiums for most Marketplace enrollees, with the exception of those with incomes that are too high to qualify for subsidies. The Kaiser Family Foundation estimates that 29 million people could lower their health insurance premiums or afford a lower deductible healthcare plan as a result of these new, higher subsidies.
For those whose hours have been reduced or whose employment has ended (except in cases of termination due to misconduct) and who would otherwise lose their healthcare coverage, COBRA premiums will be subsidized at 100% between April 1 and September 30 of 2021.
If you lost your job and didn’t enroll in COBRA during your initial 60-day election period, or if you enrolled in COBRA but then lost your COBRA coverage before the subsidy period starts (for example, you could no longer pay your COBRA premium and your coverage lapsed), you may be eligible to enroll in COBRA in a special 60-day COBRA election period created by the Rescue Plan Act. Contact your COBRA provider for details about your eligibility and plan options.
For 2021, the annual contribution limit for dependent care flexible spending accounts (DFCSA) is raised from $5,000 to $10,500 ($5,250 each for married taxpayers who file separately). Maxing out this DCFSA could save families as much as $3,500 in federal income taxes for 2021.1
Please note that this contribution limit increase currently only applies to the 2021 tax year, although there is speculation that it may be made permanent to reflect current childcare cost realities.
In addition to making part of unemployment benefits tax-free as mentioned above, several other changes were made to tax laws for the coming year. The information below is a topline summary based on IRS press releases summarizing the tax impact of the Act. This information is not intended to be a substitute for specific individualized tax or legal advice. Consult with your tax advisor for additional tax information.
Child Tax Credits. The Rescue Plan adds a child tax credit of $3,600 per child under age 6 and $3,000 for children ages 6–17. These benefit amounts begin to phase out for single parents with an AGI of more than $112,500 and married couples with an AGI of more than $150,000.1 The credit was also made fully refundable, and will be paid out monthly instead of just being credited when 2021 taxes are filed next spring. The IRS hopes to have the payout process operational by July.
Child and Dependent Care Credit. The maximum benefit has increased to $4,000 for one eligible individual and $8,000 for two or more for 2021. The credit is now fully refundable and the eligibility income limit has been increased to $125,000.1
Forgiven student loan debts. Although the Rescue Plan Act did not include student loan debt cancellation, it does make any student loan debt forgiveness passed between December 20, 2020 and January 1, 2026 tax-free.
1. This information is not intended to be a substitute for specific individualized tax or legal advice. Consult with your tax advisor for additional tax information.
Sign up for our monthly newsletter to help you stay at the top of your financial game.
Welcome! You'll now have financial tips sent to you directly each month.
You are leaving Alliant’s website to enter a website hosted by an organization separate from Alliant Credit Union. The products and services on this website are being offered through LPL Financial or its affiliates, which are separate entities from, and not affiliates of, Alliant Credit Union.The privacy and security policies of the site may differ from those of Alliant Credit Union.
You are leaving an Alliant Credit Union website and are about to enter a website operated by a third-party, independent from Alliant Credit Union. Alliant Credit Union does not manage the operation or content of the website you are about to enter. Alliant Credit Union is not responsible for the content and does not provide any products or services at this third-party website. The privacy and security policies of the site may differ from those of Alliant Credit Union.