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How do the federal relief packages help me or my business? How do I get my economic impact payment?
AMERICAN RESCUE PLAN ACT OF 2021
On March 11, 2021, the federal American Rescue Plan Act was signed into law. The act extended unemployment insurance benefits and eligibility, provided direct payments to eligible individuals and households, and expanded the federal Child Care Tax Credit.
Benefits to Unemployed Workers:
Federal expanded unemployment insurance benefits expired Saturday, September 4, including:
- Pandemic Unemployment Assistance (PUA), which provided unemployment benefits to self-employed workers, independent contractors and others who are not typically eligible for benefits
- Pandemic Emergency Unemployment Compensation (PEUC), which extended unemployment payments to those who already exhausted regular unemployment benefits
- Federal Pandemic Unemployment Compensation (FPUC), which added a weekly supplemental payment to regular unemployment
Claimants will still be able to receive benefits for weeks prior to September 4 2021, if found eligible for a claim filed before September 4, 2021. Learn more about state extended unemployment benefits here.
The American Rescue Plan Act also made the first $10,200 of unemployment benefits tax free for households with incomes below $150,000. This is administered by the IRS, there is no need to call the NJ Department of Labor. Learn more at irs.gov.
Direct Payments to Individuals and Households
The American Rescue Plan Act authorized a third stimulus check of $1400.
You can check the status of your payment on the IRS's Economic Impact Payment webpage.
NOTE: Governor Murphy has issued Executive Order No. 233 exempting stimulus payments under the American Rescue Plan from garnishment by creditors and debt collectors. In addition, the State has secured the support of dozens of banks and credit unions to protect these payments. Participating institutions have put in place measures to protect access to stimulus funds regardless of whether the consumer's bank account is overdrawn or has a negative balance. This service shall be available for a period of at least 30 days from receipt of funds in the consumer's account. For more information, visit the NJ Division of Banking and Insurance.
Paid Sick and Childcare Leave Tax Credits
The American Rescue Plan Act extended employer tax credits for federal paid sick and childcare leave through September 30, 2021. Employers are not required to provide this leave after December 31, 2020, but may voluntarily do so and receive a tax credit. Learn more at irs.gov
Note: These tax credits can now be used to take time off related to COVID-19 vaccinations and side effects. Learn more here.
Federal Student Loan Forbearance
Student Loan Payments to Restart After Jan. 31, 2022.
To provide relief to student loan borrowers during the COVID-19 national emergency, under the CARES ACT, federal student loan borrowers were automatically placed in an administrative forbearance, which allows you to temporarily stop making your monthly loan payment.
The U.S. Department of Education announced a final extension of the student loan payment pause until Jan. 31, 2022. The pause includes the following relief measures for eligible loans:
- a suspension of loan payments
- a 0% interest rate
- stopped collections on defaulted loans
Once the payment suspension ends, you'll receive your billing statement or other notice at least 21 days before your payment is due.
To determine if your loans are eligible, contact your loan servicer online or by phone. Your servicer is the entity to which you make your monthly payment. If you do not know who your servicer is or how to contact them, visit StudentAid.gov/login or call 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hearing-impaired 1-800-730-8913) for assistance.
For more information, please refer to this frequently asked questions page from the United States Department of Education.
The usual 10% penalty on early distributions of IRA and defined contributions plans (like 401(k) plans) has been waived for coronavirus-eligible distributions up to $100,000.
Source: https://www.congress.gov/bill/116th-congress/senate-bill/3548/text; https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know; https://blog.ssa.gov/commissioner-of-social-security-shares-update-about-covid-19-economic-impact-payments-for-beneficiaries/; https://www.irs.gov/coronavirus/economic-impact-payments; https://www.nj.gov/labor/lwdhome/press/2020/20200429_puapayments.shtml; https://www.nj.gov/labor/lwdhome/press/2020/20200701_20weekextension.shtml; Executive Order No. 233