The house passed the American rescue plan. Here’s what it offers to the unemployed
The US $ 1.9 trillion bailout plan is almost legal – meaning additional unemployment benefits for millions of workers should be on the way soon.
The Covid Relief Bill, passed by the House of Representatives on Wednesday, extends unemployment benefits through Labor Day, increasing it by $ 300 per week. The Senate passed the law on Saturday.
President Joe Biden hopes to sign the bill on Friday. The problem is time sensitive – millions of unemployed would lose their benefits after March 14 without another renewal.
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According to the Department of Labor, more than 18 million Americans were receiving benefits in mid-February.
“These solutions answer the demands of workers who have seen their industries evaporate over the past year and those we have heard from working parents who have been juggling childcare, distance learning and their own jobs for months,” said Rep Richard Neal, D-Mass., Chairman of the House Ways and Means Committee, said about the passage of the bill.
Here is what unemployed people need to know about the legislation.
Unemployment benefit extended
The bill would extend the duration of benefits offered through temporary pandemic relief programs.
Aid would end on September 6 instead of March 14, an extension of almost six months.
These programs include Pandemic Unemployment Assistance for the self-employed, giants and other workers who are not eligible for government assistance, as well as Pandemic Unemployment Compensation, which pays the long-term unemployed additional weeks of government benefits.
The invoice would offer PUA recipients a maximum benefit of 79 weeks, from the current 50-week limit. PEUC recipients would receive benefits for up to 53 instead of 24 weeks.
$ 300 unemployment spurt
Beneficiaries would receive an additional $ 300 per week through September 6th.
State unemployment benefits replaced an average of 38% of pre-layoff wages in the third quarter of 2020, according to the Ministry of Labor. An additional $ 300 per week would increase this wage replacement to 74%.
Covid’s $ 900 billion aid package signed by former President Donald Trump in late December also increased benefits by $ 300 per week. This supplement has been in force since the beginning of January.
A lost wage assistance grant offered by a Trump executive also offered $ 300 per week for up to six weeks starting in August.
$ 10,200 unemployment tax break
The legislation also reduces (or eliminates) the taxes workers owe on unemployment benefits they received in 2020.
According to the Century Foundation, around 40 million people received unemployment benefits last year.
The bill waives federal taxes on the first $ 10,200 in unemployment benefits collected last year. Married couples filing a joint tax return would not be taxed on the first $ 20,400 of unemployment income.
However, states cannot waive the tax. More than half currently levy state income tax on unemployment benefits.
The federal tax break applies to individuals and married couples who had an adjusted gross income of less than $ 150,000 in 2020.