Substantial Benefits for Families in New Covid Relief Package
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Here's your Money Briefing from Monday, March 22nd. I'm J.R. Whalen for The Wall Street Journal. Stimulus payments are one of the headline items from the new federal coronavirus aid package, but there are plenty of other potential benefits to know about, especially for families.
So many of the benefits are skewed towards children this year.
Our tax reporter Laura Saunders has been going through the aid package and coming up she'll run through the benefits including how some middle-class families can reduce their income legally to qualify for more. That's after the break.
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In addition to direct stimulus payments, the $1.9 trillion coronavirus relief bill contains unprecedented benefits for families with children and other dependents. For some families, it could add up to more than $10,000 in tax-free income. But those benefits aren't all automatic.
What overall benefits does the new Covid relief package promise for families?
In some cases, they require careful personal finance planning to ensure you're eligible. It can be tricky, but our tax reporter Laura Saunders is here to help. Laura, thanks for coming on the show.
Thanks so much for having me.
So it sounds like there's something for almost everyone in this package, but seems like a bit of a scavenger hunt trying to uncover some of the rebates and tax credits.
Well, you might call it a treasure hunt. Most of the benefits for families in this package, and they're mostly all for families and children, are for very low-income families. But they do spread pretty far into the middle class, and there's some for taxpayers of nearly all incomes.
Well, let's talk about who's eligible for these benefits. How does the IRS determine eligibility?
Well, Congress put the package together really quickly, but they're usually phase-outs and income levels. And this year, one of the big sort of inflection points is $150,000 for a married couple filing jointly, half that for a single person, or $112,500 for a head of household. And that's important because so many of the benefits are skewed towards children this year.
And so what is the biggest benefit for families with children?
Well, I think for a lot of families, it's going to be the new third round stimulus payment. It's $1,400 per household member, and it's not limited for adult children or adult dependents, say if your elderly parent lives with you and you're financially responsible for them. all of that was much less generous in the first two rounds but in this one it's fourteen hundred dollars per household member in most cases um up to this starts to phase out at a hundred fifty thousand dollars and so if you have a family with four children and two adults or three children and a grandmother and two adults and that's more than eight thousand dollars tax free this year
Now, people in families above the income threshold you mentioned, they can still take advantage of some of these benefits. But how do they do that?
Well, it's complicated, but I'm going to try to explain it.
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