Care Can't Wait
TIME’S UP Breaks Down the American Rescue Plan
Biden Administration, Caregiving, Equity, Public Policy
The American Rescue Plan, the latest COVID-19 relief package, is an essential down payment for millions of families who have been strained by the pandemic, an economic recession, and inadequate caregiving infrastructure. Yet 59 percent of women say they have seen, heard or read little to nothing about the American Rescue Plan (ARP).
It’s time to change that.
TIME’S UP joined U.S. House Speaker Nancy Pelosi and our partners in the #CareCantWait coalition to celebrate the American Rescue Plan and answer questions about this historic legislation.
Watch the Summit recording and learn more about how you can access new benefits below.
What tax credits are available through the ARP?
There are four important tax credits in the ARP that you should be aware of:
- Child Tax Credit (CTC): The ARP increases the amount of the CTC to $3,600 for families with children under age 6 and $3,000 for children between the ages 7 to 17 for tax year 2021. In addition, the ARP makes the CTC fully refundable – even with families with no earned income – and allows families to receive up to half of their CTC amount as one more advanced payment starting in July 2021. These expansions will lift an estimated 4.1 million children out of poverty — reducing child poverty by more than 40%.
- Earned Income Tax Credit (EITC): The ARP makes the EITC, which benefits working people and their families, more generous and more available for working people who do not claim children for the credit and are currently eligible for only a small EITC for tax year 2021.
- Child & Dependent Care Tax Credit (CDCTC): The ARP expands the CDCTC, which helps families meet child care expenses, and makes the credit refundable for tax year 2021. The ARP increases the credit up to $4,000 for one child and up to $8,000 for two children or dependents.
- Economic Impact Payments (EIP): The ARP authorizes a third round of EIP, which are advanced tax credits. Families will receive direct payments of up to $1,400 per eligible person, including children and adult dependents. Importantly, this round includes individuals with Social Security Numbers in mixed-status families.
Some of these credits don’t kick in until you file your taxes next year, but you still need to file your 2020 tax return by the May 17, 2021 deadline.
Why do I have to file my 2020 tax return?
Filing your 2020 tax return will ensure you receive the full amount of any 2020 stimulus payments that you were eligible for and that you receive the right amount of the stimulus payment from the ARP.
The IRS may have already sent you a payment based on your 2019 tax return. But if your income dropped in 2020, you may qualify for a larger stimulus payment. In that case, the IRS will send a second payment once your 2020 tax return is processed.
Keep track of any child care expenses you pay out of pocket. You will need to tell the IRS how much you pay for each child under age 13 or family member with a disability in 2021 to claim the child and dependent care tax credit.
How do I get the new child care benefits?
The ARP made a historic investment in child care, setting aside $39 billion in additional child care funding in addition to the $10 billion investment that Congress enacted in December 2020. Increased access to child care is essential, especially for women, who have been disproportionately harmed this past year. For providers, the additional funds could mean the difference between having to close permanently or staying open to serve their communities.
Visit www.childcareaware.org/ to find out if you’re eligible for this benefit in your state. This is a temporary benefit, so make sure you use it now.
How do I claim extended unemployment insurance benefits?
People who’ve been out of work for a long period of time can receive up to 53 weeks of Pandemic Emergency Unemployment Compensation (PEUC) benefits. Many don’t qualify for additional benefits, including those who’ve lost their jobs due to child care. However, they can receive Pandemic Unemployment Assistance benefits, which were increased from 50 to 79 weeks and go through September 6, 2021.
Regardless of the program, you will receive $300 additional per week – and benefits maxed out in many states at $250 per week.
Unemployment benefits are usually taxable, and families usually face a huge surprise bill this year, even if they didn’t get a chance to withhold their income. The ARP exempts the first $10,200 earned in unemployment in 2021 from any federal income taxes. This tax savings should be automatic – even if you’ve filed your taxes before the law passed.
If you have a regular job but you’re mostly a gig worker, you can get an additional $100 per week through the Mix Earner Unemployment Compensation program.
The ARP also provides extensions for smaller unemployment programs. This aid is locked in for 18 million people through September 6, 2021.
How do I get expanded health care and home and community-based services?
As people all over the country lost access to their employer-sponsored insurance, the need to expand access to health care became clear. For people with disabilities and aging adults, there is also an urgent need to expand home and community-based services (HCBS). These include day programs for older adults and people with disabilities, employment support, assistance with getting around the community, in-home support for personal care and assistance. The expanded HCBS does the following:
- Includes significant premium subsidies for people purchasing health care through the ACA marketplace;
- Reduces the cost of coverage through the Affordable Care Act for all people eligible for subsidies;
- Expands eligibility for tax credit subsidies for tax year 2021 and 2022 so households above 400% of the federal poverty line are now eligible for those subsidies;
- Opens eligibility for marketplace coverage for individuals who receive unemployment compensation during 2021;
- Creates a temporary incentive for states to expand Medicaid with a 5% additional federal match to support that expansion; and
- Includes a $12.7 billion investment for one year of funding to strengthen and expand HCBS.
How do I access pandemic leave?
The U.S. is one of the only countries in the world that doesn’t guarantee any form of paid leave, leaving us unprepared when the pandemic hit. Four in five workers don’t have access to paid leave and more than 30 million workers – especially front line workers – did not have access to a single day of paid leave.
In March 2020, the federal government enacted the Families First Coronavirus Response Act (FFCRA), giving millions of workers access to paid job-protected leave for a range of needs paid for by the federal government through tax credits to employers.
The FFCRA has saved jobs and lives, preventing more than 15,000 COVID-19 cases per day. It expired in December, but Congress extended the tax credits for employers and self-employed people through March 31 of 2021.
The American Rescue Plan builds on this progress by providing tax credits to expanded emergency paid leave through September to private sector employers with fewer than 500 employees, self-employed workers, and state and local governments.
Tax credits for employers are available for a total up to 14 weeks for workers who:
- Have COVID-19 symptoms and are seeking a diagnosis
- Are subject to a quarantine or isolation order related to COVID-19
- Have been advised by a healthcare provider to quarantine
- Need to care for their child because of their health or child care closures
- Are taking care of someone who’s been subjected to a COVID-related quarantine or isolation
- Are seeking or waiting for COVID-19 test results due to an exposure
- Are obtaining or recovering from a COVID-19 vaccination
If your private sector employer has fewer than 500 employees, they’re no longer required to provide paid leave. If they do provide it, they can get a tax credit to cover the full cost. If you have a covered need (above) you can ask about that leave and let your employer know about the tax credit. In other words, they can choose to extend the FFCRA protections at no cost of their own. If your employer is a state of local government, this applies to them as well.
If your employer is the federal government, you may have the right to paid leave from your employer.
It’s important to know that you may still have local or state paid leave laws. Call A Better Balance at 1-8333-NEED-ABB or visit their website for further guidance.
For self-employed workers, you still have the right to tax credits right now to cover leave for these purposes. In order to claim one or both of these tax credits, you must be able to provide the right documentation. You will need to provide the dates of the requested leave, a statement that validates the reason for your leave, and a statement from a qualifying individual.
- For Paid Sick Leave: You’ll need documentation from the government agency, or the health care professional who mandated your quarantine.
- For Paid Family Leave: You will need to provide the name and age of the child who is being cared for, their school or child care program that has closed, and a letter verifying the closure.
I have additional questions. Where can I go for answers?
If you have additional questions, check out visitusow.org/covid to stay up-to-date on eligibility requirements and deadlines for new benefits, such as:
- Extended unemployment insurance benefits and eligibility
- SNAP benefits
- Child Tax Credit and the Earned Income Tax Credit
- Expanded child care assistance
- Emergency grants, lending, and investment to hard-hit small businesses, including women and minority-owned businesses
This legislation is a monumental first step, but the structural barriers that women workers have faced for generations aren’t going away. That’s why the next step must be comprehensive and permanent care solutions, including national and permanent access to paid leave, affordable child care and in-home elder care, and fair wages and protections for caregivers.
We have an opportunity to come out of this crisis to make meaningful reforms to create an economy that works for everyone. If we want to rebuild our economy, paid leave and caregiving must be part of our infrastructure – just as key as roads and bridges – to create a future grounded in racial and gender equity.