President Biden signed the American Rescue Plan on March 11, 2021. This bill, otherwise known as the Covid relief bill should have a positive effect on families. Here are some important points to know for your family:
This law provides stimulus payments up to $1,400 per person, including for each minor child. The full amount goes to individuals earning less than $75,000 of adjusted gross income, heads of households, such as single parents, earning less than $112,500 and married couples earning less than $150,000. However, as incomes go up, the stimulus payment phases out more quickly than in previous stimulus payments. Individuals earning $80,000 per year, heads of households earning $120,000 per year, and married couples earning $160,000 will not see a stimulus payment.
Stimulus money for children is assigned based on who claimed a child on the last tax return filed. In a divorce or paternity situation, a child is typically allocated as a deduction in an order or judgment. Therefore, whoever is allowed to deduct that child for that tax year will typically receive the stimulus money. Some attorneys put prospective language in a final agreement or order which specifically states that any tax refund, tax stimulus or rebate should be equally divided. You should check your divorce judgment or paternity order for this kind of language. Lastly, you should discuss with the other parent whether they would be willing to equally divide the stimulus money. If you believe that none of these options end in a fair result to you, then you could file a motion with the court asking that you be awarded one-half of the stimulus money for that child. The courts have been very sympathetic to this argument.
There will be a $300 federal increase to weekly unemployment payments. The law also makes the first $10,200 of unemployment payments tax-free for households with annual incomes less than $150,000
The law further extends the 15% increase in food stamp benefits through September 2021. The law also extends the Pandemic-EBT, which will provide families whose children’s schools have closed with funding to replace reduced-price and free meals that children would have received if schools remained open, through this summer.
This law provides about $20 billion to state and local governments for low-income households to cover back rent, provide rental assistance, and assistance for utility bills. It also provides $10 billion to help homeowners who are struggling to pay their mortgages, property taxes, and utilities.
Tax credits for families was also increased, where the child tax credit was increased to $3,600 for each child under 6 and $3,000 for each child under 18. This increase is available for single parents with annual incomes up to $75,000 and joint filers with annual incomes up to $150,000.
Hopefully the American Rescue Plan assists your family during this difficult and uncertain time. If you have questions, or concerns, regarding how the American Rescue Plan may affect your family during a divorce, or existing orders regarding child support and other financial issues involving your children, please call Nelson, Krueger & Millenbach, LLC at (414) 258-1644 to schedule a free initial consultation to discuss your case.
–Attorney Aislinn Penkwitz
[MS1]Minors get the 1,400 too?!