The American Rescue Plan, passed by Congress and signed by President Biden, has been discussed mainly for the $1,400 economic impact payments many Americans received to ease financial hardship and boost the economy. Bur several other provisions of the ARP are worth discussing too.
Tax relief for unemployment compensation
Another provision in the ARP waives taxes on the first $10,200 that low and moderate income people received in unemployment compensation in 2020. This tax relief covers those who received unemployment benefits through federal programs and those who received benefits through their state’s unemployment fund.
Forgiveness of Premium Tax Credit payments
The ARP temporarily raised the earnings limits so that higher earners are now eligible for Premium Tax Credits (PTCs). This means that people who found health insurance through the marketplace to be too expensive may now be able to afford it. Additionally, many of those who would have to pay because they receive too high of a tax credit will now have those payments forgiven.
The many changes brought by the American Rescue Plan can be difficult to understand. For questions about the American Rescue Plan and your taxes, contact David Kreider at
H & R Block: 520-625-8732 for an appointment.