SALT LAKE CITY — There’s no way to encapsulate a $1.9 trillion dollar spending bill in a short story, but the video above walks through a number of the most important aspects of the American Rescue Plan to Utahns.
Below are the most important things for Utah residents to keep in mind:
DIRECT PAYMENTS: Direct money in the form of $1,400 dollar stimulus checks and child tax credits should come right into your bank account if you file taxes by direct deposit. If you get mailed checks they should come to you that way. Both will come from the IRS.
CHILD TAX CREDIT: These payments should begin in July, according to the bill. Most experts expect the payments to be monthly, though that hasn’t been finalized. You will also get credit for January through June, but most likely that will be in the form of a tax credit when you file a return next year.
UNEMPLOYMENT: If you have already filed taxes for 2020 and you paid taxes on unemployment benefits, talk to a tax professional about amending your return. That $10,200 exemption should really help out and is available to you. If you are currently on unemployment, the continuation of the extra $300 should continue automatically as long as you keep reporting your status.
CHILDCARE TAX CREDIT & EARNED INCOME TAX CREDIT: These are credits, meaning if you are eligible you will get the full amount, but that will also come with next year’s tax return. These increased credits are just in place for 2021, though Democrats have been clear they want to make them permanent afterward. Hard to know if they could pull that off, considering they might need sixty votes in the Senate, but it is one of the most bi-partisan proposals in the bill because of it’s similarity to a proposal from Utah’s Senator Mitt Romney, and support from several conservative think tanks who see it as a pro-family policy.
PAYCHECK PROTECTION LOAN: Howard Headlee with the Utah Bankers Association emphasized that the loan applications will now be judged by the amount of revenue lost because of Covid rather than the amount of income lost. This reporter (Max Roth here) is no expert, but my understanding is that a number of very small business owners and sole proprietors report very little income on their “Schedule C” tax form. Before now, loans were based on that “Schedule C” income. It is not now and businesses that explored PPP and did not apply should look again. If you did already apply, Headlee says you cannot amend your application now, though he hopes they change that rule.
Eligibility for all of this money is based on income thresholds that vary. The $1400 checks phase out quickly after an individual makes $75,000, a head of household makes $112,000, and a married couple makes $150,000. The child tax credits start to phase out at the same points, but the phase out is far more gradual.