What does the American Rescue Plan (third stimulus package) mean for the Affordable Care Act?
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This blog content applies to health care coverage for 2021 and 2022.
Need to enroll in a health insurance policy or update the one you have? Open Enrollment for the Health Insurance Marketplace (Healthcare.gov) is Nov. 1, 2022, to Jan. 15, 2023.
What people need to know about the relief bill and its changes to the ACA:
1. Lower monthly premiums: federal government subsidies will reduce the amount you have to pay for health insurance each month.
The plan significantly increases premium tax credits for 2021 and 2022. These increased subsidies will substantially reduce or even eliminate monthly premiums for millions of people with Marketplace plans.
On average, premiums will decrease by $50 per month. No one will have to spend more than 8.5% of their income on premiums. People with income below 150% of the poverty line (about $19,000 for a single person, $25,800 for a couple, and $39,000 for a family of four) will pay no premiums for some plans, including Silver plans with cost sharing reductions.
Current enrollees, including those who recently enrolled through the 2021 Special Enrollment Period, will need to update their Healthcare.gov applications to get the new subsidies. These subsidies will be visible on Healthcare.gov starting April 1, and you will start receiving them on May 1. You will need to reselect your current plan for the changes to take effect to reduce your premiums for the remainder of the year. If you do nothing, you do not lose access to the tax credits, but you’ll get them as a refund when you file your taxes next year. When you file your taxes in 2022, you will get a reimbursement of the additional tax credits you would have qualified for from January through April 2021.
Due to the SOEP, you may be able to change plans until August 15. If you qualify for these additional benefits, the new tax credits will be applied to your policy starting on May 1.
If you purchase a plan now, you will get a refund if you go back into your Healthcare.gov application after April 1.
2. Increase Subsidies for Those Who Have Lost Their Jobs
The plan expands premium tax credits for people who receive unemployment benefits in 2021. This means that individuals currently unemployed are guaranteed to get the most generous subsidies on Healthcare.gov. It doesn’t matter what their actual year-end income is.
These additional tax credits will be available starting this summer.
3. Protect Families from Having to Pay Back Subsidies
In 2020 some people lost their jobs early in the year but later got new ones with higher earnings than they had expected. Others worked additional hours or received bonus pay as essential workers. The American Rescue Plan exempts low- and moderate-income families from having to repay the premium tax credit they received in 2020.
4. Government will pay the cost of COBRA coverage
If you lost your job and your job’s health insurance, you can use COBRA to keep your same health insurance plan. But instead of losing your employer’s contribution for your premiums, the government will pick up the bill. The government will pay the entire COBRA premium from April 1 through September 30, 2021.
If you get a new job that offers health insurance before Sept. 30, you will lose eligibility for this no-cost COBRA coverage. And someone who left a job voluntarily would not be eligible, either.
We encourage you to review your options with the Marketplace before signing up for COBRA, since plan options may be more attractive to you, depending on your particular situation.
VITA Offers Free Help Filing 2020 Taxes
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The IRS Volunteer Income Tax Assistance (VITA) program is available by virtual appointment through tax season to help eligible residents file their taxes.
If your household income in 2020 was $57,000 or less, you could qualify to have your taxes prepared and submitted through this program.
Due to COVID-19 restrictions, this year’s VITA services will be offered virtually and securely by IRS certified tax preparers, using Adobe Scan, Google Duo, Verifyle, and Zoom to complete returns. Learn more and register for your free appointment.
An in-person VITA site is open at the Dellwood Center in Huntersville by appointment only until April 10. Learn more and make an appointment.
VITA ofrece servicios gratuitos de preparación de impuestos locales
El programa de Asistencia Voluntaria de Impuestos sobre la Renta (VITA por sus siglas en inglés) del IRS está disponible mediante cita virtual durante la temporada de impuestos para ayudar a los residentes elegibles a presentar sus impuestos.
Si el ingreso de su hogar en 2020 fue de $ 57,000 o menos, podría calificar para que se preparen y presenten sus impuestos a través de este programa.
Debido a las restricciones de COVID-19, los preparadores de impuestos certificados por el IRS ofrecerán los servicios VITA de este año de manera virtual y segura, utilizando Adobe Scan, Google Duo, Verifyle y Zoom para completar las declaraciones. Obtenga más información y regístrese para su cita gratuita.
Wednesday, Feb. 10, 2021, North Carolina Governor Roy Cooper signed a COVID-19 relief bill that extends the deadline for parents to apply for $335 NC Extra Credit grants.
The $335 checks are intended to offset parents’ virtual schooling and child-care costs during the COVID-19 pandemic. They were part of a previous coronavirus relief package, but there were leftover funds after more than a million parents received their checks. This extension allows parents who qualified for an NC Extra Credit grant but did not receive checks in 2020 apply for the grant through May 31, 2021.
The new law extending the NC Extra Credit Grant program through May 31, 2021 only applies to eligible individuals who have NOT received the $335 grant. If you have already received the $335 grant, you are not eligible under the new law.
The application for the NC Extra Credit Grant will only be available on the NC Department of Revenue website, but we do not know when.
Sign up for an Extra Credit Grant alert, and we will send you an email when the application is ready.
North Carolina families with qualifying children who were 16 or younger at the end of 2019 who did not already receive the $335 check from the NC Department of Revenue.
Qualifying individuals who were not required to file a 2019 state tax return and have NOT already received the $335 grant.
Eligible individuals who filed a 2019 state tax and did NOT receive the $335 grant. This includes individuals who suffered from a tax preparation software error that resulted in their 2019 NC tax return not including their qualifying children.
Ready to file your 2020 tax return?
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Here are five things to keep in mind this tax season:
1. The tax filing season is February 12th, 2021 through April 15th, 2021
Update
The federal tax filing deadline has been extended to May 17, 2021. The filing deadline for state taxes in North Carolina is also May 17.
The Internal Revenue Service announced that the nation’s tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns.
The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.
Start collecting your tax documents and preparing your tax return today!
2. Many families can file for free using IRS Free File
The IRS Free File Program is a partnership with tax filing software leaders who provide their brand-name products for free. There are two ways to file your return online for free:
Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites. Only taxpayers whose adjusted gross income (or AGI) is $72,000 or less qualify for any IRS Free File partner offers.
Free File Fillable Forms are electronic federal tax forms you can fill out and file online for free. If you choose this option, you should know how to prepare your own tax return. It is the only IRS Free File option available for taxpayers whose income (AGI) is greater than $72,000.
3. Eligible people who didn’t receive stimulus payments can claim them with the Recover Rebate Credit
Economic Impact Payments (EIP) are referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR. You may be eligible to claim your EIP through the RRC if you are a recent college graduate, were claimed as a dependent on a 2019 tax return but will file independently on your 2020 tax return, are incarcerated or were recently incarcerated, or missed the Nov. 21 deadline to use the non-tax filer tool to claim your stimulus check.
4. You can deduct up to $300 in charitable donations without itemizing
The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted last spring, includes several temporary tax changes helping charities, including the special $300 deduction designed especially for people who choose to take the standard deduction, rather than itemizing their deductions.
Under this new change, individual taxpayers can claim an “above-the-line” deduction of up to $300 for cash donations made to charity during 2020. This means the deduction lowers both adjusted gross income and taxable income – translating into tax savings for those making donations to qualifying tax-exempt organizations.
5. 2019 incomes can be used to determine your Earned Income Tax Credit
The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund.
You may claim the EITC if your income is low- to moderate. The amount of your credit may change if you have children, dependents, are disabled or meet other criteria.
If your earned income was higher in 2019 than in 2020, you can use the 2019 amount to figure your EITC for 2020.
COVID Scams: 5 things to remember during the vaccine roll out
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As North Carolinians begin receiving COVID-19 vaccinations, the NC Department of Justice is warning about an increase in vaccine-related scams. Here are five things to keep in mind as the vaccines are rolled out:
Everyone who wants a vaccine can have one. Even if you don’t have health insurance, COVID-19 vaccine will be available for free for most people. Those with health insurance should bring this information with them to their vaccination appointment.
Beware of solicitations. Anyone who calls, texts, messages, emails, or posts to social media that you can pay to have the vaccine reserved for you or mailed to you is a scammer.
Legitimate providers will not request your bank account, Social Security, or credit card number to get the vaccine. Beware of websites made to resemble legitimate health department or health care provider websites.
No identification, immigration status, or social security number is required to receive the vaccine. Immigrants regardless of legal status can receive the vaccine without worry of their information being provided to ICE or their immigration status being affected. Any information provided is kept confidential and cannot be shared with ICE or immigration enforcement.
Stay up to date. The best place to learn about vaccine availability and when you may be eligible to receive the vaccine is the North Carolina Department of Health and Human Services “Your Spot, Your Shot” website.
To learn more about vaccine availability in Mecklenburg County, call the Mecklenburg County Health Department’s Public Health Hotline, 980-314-9400 or visit their website.
Learn more about scams related to COVID-19 Vaccine
If you are eligible and don’t receive your first or second stimulus payment or the full amount of your payment, you can claim it when you file your 2020 tax return in early 2021. The IRS usually begins to accept returns in late January. This year, the tax form will include a section for filers to claim missed stimulus payments as a Recovery Rebate Credit.
Eligible individuals can claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. These forms can also be used by people who are not normally required to file tax returns but are eligible for the credit.
How do I find the stimulus payment amount I received? Refer to your Notice 1444 for the payment amount you were issued, before any offsets. You’ll need to this information to determine the amount to include on the worksheet that will be included in the 2020 Instructions for Form 1040 and 1040-SR and when completing the Form 1040 or Form 1040-SR.
Who Qualifies for the Recovery Rebate Credit? The Recovery Rebate Credit is figured like the first and second stimulus payments, except that the credit eligibility and the credit amount are based on the tax year 2020 information shown on the 2020 tax return filed in 2021.
Generally, you are eligible to claim the Recovery Rebate Credit, if you were a U.S. citizen or U.S. resident alien in 2020, are not a dependent of another taxpayer for tax year 2020 and have a Social Security number valid for employment that is issued before the due date of your 2020 tax return (including extensions).
You can take the Recovery Rebate Credit on your 2020 tax return for any recovery rebate amount that is more than the stimulus payment you received in 2020 and early 2021.
How to Claim the Recovery Rebate Credit: FAQs
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In late December, lawmakers passed a coronavirus relief package that provides essential economic relief for millions of workers and people with low incomes. One component of the package is a second round of economic stimulus payments. See below for FAQs regarding distribution of the second stimulus payment. Additionally, we have general FAQs regarding the payment, “Mixed-Immigration Status Families and the Economic Impact Payment,” and “Distribution of the Second Stimulus Payment.”
What is the Recovery Rebate Credit?
If you are eligible and don’t receive your first or second stimulus payment or the full amount of your payment, you can claim it when you file your 2020 tax return in early 2021. The IRS usually begins to accept returns in late January. This year, the tax form will include a section for filers to claim missed stimulus payments as a Recovery Rebate Credit.
Eligible individuals can claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. These forms can also be used by people who are not normally required to file tax returns but are eligible for the credit.
How do I find the stimulus payment amount I received?
Refer to your Notice 1444 for the payment amount you were issued, before any offsets. You’ll need to this information to determine the amount to include on the worksheet that will be included in the 2020 Instructions for Form 1040 and 1040-SR and when completing the Form 1040 or Form 1040-SR.
Who Qualifies for the Recovery Rebate Credit?
The Recovery Rebate Credit is figured like the first and second stimulus payments, except that the credit eligibility and the credit amount are based on the tax year 2020 information shown on the 2020 tax return filed in 2021.
Generally, you are eligible to claim the Recovery Rebate Credit, if you were a U.S. citizen or U.S. resident alien in 2020, are not a dependent of another taxpayer for tax year 2020 and have a Social Security number valid for employment that is issued before the due date of your 2020 tax return (including extensions).
You can take the Recovery Rebate Credit on your 2020 tax return for any recovery rebate amount that is more than the stimulus payment you received in 2020 and early 2021.
Distribution of the Second Stimulus Payment: FAQs
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In late December, lawmakers passed a coronavirus relief package that provides essential economic relief for millions of workers and people with low incomes. One component of the package is a second round of economic stimulus payments. See below for FAQs regarding distribution of the second stimulus payment. Additionally, we have general FAQs regarding the payment, “Mixed-Immigration Status Families and the Stimulus Payment,” and “How to Claim the Recovery Rebate Credit.”
When will the IRS make the second stimulus payments?
The IRS will send the second stimulus payments to taxpayers through January 15th.
Will I receive a letter or notice from the IRS about my second stimulus payment?
Yes, the IRS will issue a notice, or letter, about the second stimulus payment. Please keep your notice, formally called Notice 1444-B, with your tax records. You will need it when you file your 2020 tax return.
How can I check on the status of my second stimulus payment?
You can use the IRS’ Get My Payment tool to check on the status of your second stimulus payment.
Will the IRS’ Get My Payment tool give me the status of my second stimulus payment?
You will be able to check the status of your first and second stimulus payments using the Get My Payment tool. The status includes the date of the payment and the method (direct deposit or mailed payment date). Mailed payments will require more processing and mailing time. As more information becomes available, the IRS will provide updates.
Some people received their first stimulus payment in multiple payments. If you received more than one payment for your first stimulus payment, the Get My Payment tool will show you only the most recent payment information.
Some people visiting the site may get a “please wait” or error message due to the high volumes coming in. The “please wait” message is a normal part of the site’s operation. The IRS encourages people to check back later. Also, there is a limit to the number of times people can access Get My Payment each day. When people reach the maximum number of accesses, Get My Payment will inform them they will need to check back the following day.
I didn’t receive a direct deposit yet. Will I get a second Economic Impact Payment?
Maybe. IRS updated Get My Payment tool (GMP) for individuals who are receiving the second stimulus payment on January 5, 2021. If you checked GMP on or after January 5 then:
If GMP reflects a direct deposit date and partial account information, then your payment is deposited there.
If GMP reflects a date your payment was mailed, it may take up to 3 – 4 weeks for you to receive the payment. Watch your mail carefully for a check or debit card.
If GMP shows “Payment Status #2 – Not Available,” then you will not receive a second Economic Impact Payment and instead you need to claim the Recovery Rebate Credit on your 2020 Tax Return.
Because of the speed at which the law required the IRS to issue the second round of stimulus payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar. By law, the financial institution must return the payment to the IRS; they cannot hold and issue the payment to an individual when the account is no longer active. If Get My Payment shows “Payment Status #2 – Not Available” you will not receive a second EIP. (You will need to claim it on your 2020 tax return if you are eligible.)
What if I have a different bank account than I had on my 2019 tax return? What should I do?
If the second stimulus payment was sent to an account that is closed or is no longer active the financial institution must, by law, return the payment to the IRS, they cannot hold and issue the payment to an individual when the account is no longer active. The IRS advises people that if they don’t receive the full amount of their stimulus payment, they should file their 2020 tax return electronically and claim the Recovery Rebate Credit on their tax return to get their payment and any refund as quickly as possible.
Why can’t the IRS reissue the second stimulus payment to me?
The IRS is working to deliver the second stimulus payment quickly, as required by law, while still preparing for the upcoming 2021 tax filing season. Due to the compressed timeline, the IRS is unable to reissue and mail checks and instead encourages people to file their 2020 tax return electronically to claim and receive the Recovery Rebate Credit quickly as possible.
Can I call the IRS, software company or bank to resolve issues with my Economic Impact Payment?
People should visit IRS.gov for the most current information on the second round of stimulus payments rather than calling the agency or their financial institutions or tax software providers. IRS phone assistors do not have additional information beyond what’s available on IRS.gov.
Mixed-Immigration Status Families and the Stimulus Payment: FAQs
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In late December, lawmakers passed a coronavirus relief package that provides essential economic relief for millions of workers and people with low incomes. One component of the package is a second round of economic stimulus payments. See below for FAQs regarding distribution of the second stimulus payment. Additionally, we have general FAQs regarding the payment, “Distribution of the Second Stimulus Payment,” and “How to Claim the Recovery Rebate Credit.“
I filed my 2019 tax return as married filing jointly and I have a Social Security number valid for employment while my spouse has an Individual Taxpayer Identification Number (ITIN), am I eligible for the second stimulus payment?
You are eligible for a second stimulus payment for yourself and any dependents you claimed who also have Social Security numbers valid for employment, but not for your spouse. (Mixed-status families who did not receive the first stimulus payment due to the previous restrictions on spouses of people filing with ITINs will now be eligible to get that payment retroactively when they file their 2020 tax return. See discussion below.)
I filed my 2019 tax return as married filing jointly and both my spouse and I have ITINs, am I eligible for the second stimulus payment for my dependents who have Social Security numbers valid for employment?
No, you are not eligible for a second stimulus payment for yourself, your spouse, or your dependents.
I have an ITIN and filed my 2019 tax return as single, am I eligible for the second stimulus payment?
No, you are not eligible for the second stimulus payment.
I have an ITIN and filed my 2019 tax return as Head of Household, am I eligible for the second stimulus payment?
No, you are not eligible for the second stimulus payment. Nor are you eligible for the second stimulus payment for any dependents you claimed, even those dependents with Social Security numbers valid for employment.
Do I qualify for the payment if I’m a resident alien?
A person who’s a qualifying resident alien with a Social Security number valid for employment is eligible for the second stimulus payment only if he or she is a qualifying resident alien in 2020 and may not be claimed as a dependent of another taxpayer. A nonresident alien in 2020 isn’t eligible for the second stimulus payment. An alien who received a payment but isn’t a qualifying resident alien for 2020 should return the payment to the IRS.
Questions about Mixed Status families and the Economic Impact Payments? Contact a tax advocate at 980-202-7329.
COVID Relief Act $600 Stimulus Payments: General FAQs
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*Originally posted on Dec. 30th, 2020. Updated Jan. 8th, 2021*
Generally, if you’re a U.S. citizen or U.S. resident alien, you may be eligible for $600 ($1,200 for a joint return), plus $600 for each qualifying child, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2019 tax return, have a social security number (SSN) valid for employment (see exception when married filing joint) and your adjusted gross income (AGI) does not exceed:
$150,000 if married and filing a joint return or if filing as a qualifying widow or widower;
$112,500 if filing as head of household; or
$75,000 for eligible individuals using any other filing status
Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.
You aren’t eligible for a payment if any of the following apply to you:
You were claimed as a dependent on another taxpayer’s 2019 tax return (for example, a child or student who may be claimed on a parent’s tax return or a dependent parent who may be claimed on an adult child’s tax return).
You don’t have a Social Security number that is valid for employment issued before the due date of your 2019 tax return (including any extensions).
You’re a nonresident alien.
People who died before 2020.
Are an estate or trust.
What is meant by a Social Security number that is valid for employment?
A valid Social Security number for the second stimulus payment is one that is valid for employment in the United States and is issued by the Social Security Administration (SSA) before the due date of your 2019 tax return (including the filing deadline postponement to July 15 and an extension to October 15 if you requested it).
If you were a U.S. citizen when you received the Social Security number, then it’s valid for employment. If “Not Valid for Employment” is printed on your Social Security card and your immigration status has changed so that you are now a U.S. citizen or permanent resident, ask the SSA for a new Social Security card. However, if “Valid for Work Only With DHS Authorization” is printed on your Social Security card, you have the required Social Security number only if the Department of Homeland Security authorization is valid.
How much will the second stimulus payment be?
The second stimulus payment will be $600 per qualifying adult ($1,200 for married taxpayers filing a joint return) and $600 per child under 17 years old. Children who are 17 years old and older as well as other dependents are not eligible for the $600 second stimulus payment.
What do I need to do to get my payment?
No action is necessary. Your payment will be issued based on the information the IRS has on file for your 2019 tax return, the information provided by you to the Non-Filers: Enter Payment Info Here tool, payment information entered on the Get My Payment tool, or information provided by a Federal Agency that issued benefits to you (Social Security Administration, Veteran Affairs, or Railroad Retirement Board). (If you don’t get a payment and you are eligible to receive one, it may be claimed as a Recovery Rebate Credit on your 2020 tax return.)
Will the Non-Filers tool be available if I’m not required to file and didn’t use it before November 22, 2020?
No. The Non-Filers tool is no longer available. (If you are eligible for a second stimulus payment and don’t get one, the payment may be claimed as a Recovery Rebate Credit on your 2020 tax return.)
What tax year will the IRS look to in determining my eligibility for the second stimulus payment?
The IRS will look to the 2019 tax year to make eligibility determinations for the second stimulus payment.
Will I need to pay the second stimulus payment back to the IRS at some point and will the payment affect my eligibility for other tax credits?
You will not need to pay the second stimulus payment back to the IRS because the payments are an advance against a new credit for tax year 2020 and these payments will not affect your eligibility for other tax credits.
I’m a college student, can I receive the $600 second stimulus payment if I can be claimed as someone else’s dependent?
You can’t receive the $600 second stimulus payment if you can be claimed as someone else’s dependent. You can be claimed as someone else’s dependent based on your relationship to the filer, your age, whether you lived with your parents for more than half of the year, and whether you were financially independent for more than half of the year, among other factors. This will affect many full-time college students under age 24. However, it’s important to review the rules, since not all college students are dependents. (People who were dependents in 2019, but not 2020, can claim both stimulus payments as a Recovery Rebate Credit when they file their 2020 tax return.)
Do I need earned income to qualify for a second stimulus payment?
You don’t need to have earned income to qualify. The second stimulus payment is available to those with little to no income. Even if you are making $0, you can still receive the full payment. The second stimulus payments phase out at higher income levels, starting at $75,000 for single filers. The phase-out rates are the same between the first and second round of payments – $5 for every $100 that you made above the Adjusted Gross Income (AGI) limit – but because the second stimulus payments are smaller, some people who received a partial payment in the first round won’t get one this time.
Will the second stimulus payment affect my eligibility for public benefits?
Like other tax refunds, the second stimulus payment will not count toward eligibility for means-tested programs and will be disregarded as an asset for 12 months. This means the second stimulus payment won’t jeopardize your participation in programs including Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and public housing.
Is the second stimulus payment treated as taxable income?
No, the second stimulus payment is not considered taxable income.
Is an incarcerated individual eligible for the second stimulus payment?
Yes, individuals will not be denied a second stimulus payment solely because they are incarcerated. An incarcerated individual may be issued a payment if all eligibility requirements are met and the individual filed a 2019 tax return that was processed by the IRS or used the Non-Filers: Enter Payment Info Here tool prior to November 22, 2020. (Incarcerated individuals who don’t get a second stimulus payment and are eligible to receive one, may claim a Recovery Rebate Credit on their 2020 tax return. They can also claim the first stimulus payment as a Recovery Rebate Credit on their 2020 tax return.)
Can the second stimulus payment be intercepted?
The second stimulus payment can’t be intercepted for past-due taxes, student loans, Unemployment Insurance over-payments, or for child support that is owed (the first stimulus payment was subject to seizure for outstanding child support).
Where can I get more information?
For more information about Economic Impact Payments and the 2020 Recovery Rebate, key information will be posted on IRS.gov/eip. Later this week, you may check the status of your payment at IRS.gov/GetMyPayment. For other COVID-19-related tax relief, visit IRS.gov/Coronavirus.
