On March 12, the American Rescue Plan was signed into law by President Biden. The purpose of this law is to help families and businesses deal with the continued hardships brought on by COVID-19. The new law is quite expansive, but there are things in it that will have an impact on you if you’re being paid on the books.
If you currently work under the table, have your employer contact us and we can help you move toward being eligible for these four new benefits.
1. A stimulus check of up to $1,400
The American Rescue Plan provides a direct payment of up to $1,400 for workers earning $80,000 or less per year. If you make $75,000 or less, you will get the full $1,400, but your stimulus payment will gradually decrease if your income is between $75,000 and $80,000. Just like with the previous two stimulus payments that were granted by the CARES Act and the Continuing Appropriations Act, you will need a record of filing a tax return to be eligible for this benefit.
2. A bigger tax break from the Child Tax Credit
Previously, the federal government gave families a $2,000 tax break for each child they have. But under the American Rescue Plan, the Child Tax Credit increases to $3,000 per child for 2021 ($3,600 if your child is under 6 years old). Additionally, half of what your tax credit will be for this year will be paid in advance to you in six monthly payments from July through December.
3. Additional unemployment benefits if you lose your job
Both the CARES Act and the Continuing Appropriations Act provided additional income to workers that lost their job. These benefits were set to expire in March, but the American Rescue Plan extends them through the end of August. Specifically, if you are laid off due to no fault of your own, you can receive an additional $300 in federal benefits each week on top of what you are given by the state. Like the stimulus payments mentioned above, this benefit is only available if the family you work for is paying you on the books.
4. Increased eligibility for the Earned Income Tax Credit
The Earned Income Tax Credit (EITC) is available to workers with low wages to forgive some, or all, of the taxes they owe. The American Rescue Plan makes this tax credit available to more workers and adjusts how much the credit will be for other workers that are already eligible to take it.
As you can see, there are some significant financial benefits coming your way from the American Rescue Plan. If you know someone that is currently working under the table, please share this information with them so they can take action to help themselves. We’re constantly helping families transition their caregivers to legal pay and we make the process as easy as possible.