FEATURE
Economic Stimulus and Tax Extenders Ride the Coattails of Government Funding in the
By Don Carpenter and Tim Thomasson
CONSOLIDATED APPROPRIATIONS ACT, 2021
I
n the waning days of 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 (the Act), a $1.4 trillion omnibus spending bill that provides appropriations for funding 12 government departments. But this was overshadowed by the additional $900 billion included in the bill as a second round of economic stimulus in response to the pandemic, and new and extended tax provisions intended to advance the nation’s combined energy policy and further assist struggling families.
Pandemic Relief for Individuals with $600 Direct Payment Modeled after the earlier stimulus checks disbursed in the spring of 2020, $166 billion of the pandemic relief appropriation was dedicated to direct payments to taxpayers. This provision was the focus of considerable debate. Ultimately, it was settled that single taxpayers reporting up to $75,000 of adjusted gross income (AGI) on their 2019 income tax return would receive the full $600 payment with the amount being reduced ratably 20 Texas Society of CPAs
until full phase out at $87,000 of AGI. Married couples filing jointly receive $600 each if AGI does not exceed $150,000 with full phase out set at $174,000. The payments to those qualifying as heads of household begin phase out at AGI of $112,500 (full phase out at $124,500). The remittance also includes $600 for each dependent child below 17 years of age. Eligible individuals must have a valid Social Security number and not be a nonresident alien or claimed as a dependent by anyone else. Each dependent child must also have a valid Social Security number or adoption taxpayer identification number. The Department of Treasury was authorized to make advance payments based on taxpayers’ 2019 tax returns. Remittances were to be made via direct deposit for taxpayers for which the IRS has bank account information. All others would receive either paper checks or debit cards. Taxpayers who qualify but did not receive payments can claim the amount as a credit on their 2020 income tax return filed in 2021.
Taxpayers will not be required to repay an advance stimulus payment that exceeds the amount of their eligible credit.
Other Provisions Target Specific Needs In addition to stimulus checks, $120 billion was allocated for supplemental unemployment benefits: • The federal assistance will provide $300 per week to supplement state funded benefits for the period December 26, 2020 through March 14, 2021. • Benefits are also available to self-employed individuals who self-certify that they have been impacted by COVID-19. • Maximum number of weeks an individual can claim benefits was extended to 50 weeks. The Act also extended the national eviction moratorium that was put in place under the CARES Act. CARES delayed evictions for federally backed properties, which was then extended to all properties by the Centers for Disease Control and Prevention in September 2020. The moratorium, which was set to expire on December
