Tax benefits
Child Tax Credit – For
2021, the American Rescue Plan makes the child tax credit
fully refundable, increases the size of the per-child tax credit from $2,000 to
$3,000 (or $3,600 per child under age 6), expands eligibility to include
17-year-old children and pays out the credit monthly. The expansion of this tax
credit will benefit more than 7.8 million children in California.
Earned Income Tax Credit:
For 2021, the American Rescue Plan expands eligibility to
include taxpayers without qualifying children starting at age 19 (currently age
25) and removes the upper age limit, and makes the phase-out of the credit more
gradual. It also increases the cap on investment income to qualify for the credit
from $3,650 to $10,000. This will benefit an estimated 1.8 million Californian
workers.
Child and Dependent Care Tax Credit – For 2021, the American
Rescue Plan increases the child and dependent care tax credit to
$4,000 for one child and $8,000 for two or more children
Help for student loan borrowers
- Student loan borrowers: Monthly student loan payments and interest for most federal student loan borrowers will be suspended through September 30, 2021. Suspended payments through September 30, 2021 will count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.
- Tax relief for student loan forgiveness: All types of student loan forgiveness will be tax-free through December 31, 2025.
- Additional financial aid for students and colleges: The American Rescue Plan Act provides $39.6 billion in higher education relief—at least half of which must be spent as financial aid to students to support their basic needs like food, housing, and health care. The remaining funding is dedicated to helping higher education institutions defray lost revenue and cope with increased costs brought by the pandemic, including providing COVID-19 testing, vaccination, PPE, among other efforts to promote safe learning.
- Pell grants and financial aid recipients: The CARES Act acknowledges the circumstances of students who dropped out of school due to the coronavirus pandemic and does not require them to return unused Pell Grants or federal student loans. In addition, the CARES Act protects these students’ future Pell Grant or other financial aid program eligibility.
- Federal work-study: Federal work-study payments to students who are unable to work will continue.
To learn more about qualifying for coronavirus-related college student assistance
or to access additional resources, visit the Consumer Financial
Protection Bureau and Department of Education @ consumerfinance.gov and studentaid.gov
Help for homeowners and renters
The American Rescue Plan provides $21.5
billion in emergency rental assistance through the Treasury Department.
California will receive an estimated $2 billion. To apply for emergency rental
assistance, visit: https://home.treasury.gov/policy-issues/cares/emergency-rental-assistance-program
The bill also provides $9.9 billion to help homeowners struggling with mortgage and utility payments. To apply for mortgage assistance, visit: https://www.consumerfinance.gov
To learn more about qualifying for coronavirus-related federal housing assistance or to access additional resources, visit the Consumer Financial Protection Bureau’s webpage on coronavirus-related housing relief visit: https://www.consumerfinance.gov
Assistance with food insecurity
If you or your family are having difficulty keeping food on the table, you may be
eligible for assistance through the Supplemental Nutrition Assistance Program
(SNAP). The American Rescue Plan has extended increased food
stamp benefits through September 30, 2021.
- Visit FNS.USDA.GOV for more information
The American Rescue Plan also temporarily expands SNAP eligibility to include
students enrolled at least half-time in an institution of higher education, who
either 1) are eligible to participate in state or federally financed work study during the regular school year, as determined by the institution of higher
education, or 2) have an expected family contribution (EFC) of 0 in the current
academic year.
- To learn more, visit the FNS website of the Food and Nutrition Service, an agency within the Department of Agriculture.
Furthermore, the American Rescue Plan provides critical and continued investments in vital nutrition assistance programs, such as school meals, Women, Infants and Children (WIC), and the Commodity Supplemental Food Program, to help ensure that vulnerable populations do not go hungry.
Many school districts across the state have set up school lunch pick up programs
during school closures. Find more information by visiting your local school
district website
For more information on any of these topics visit: https://www.feinstein.senate.gov/public/index.cfm/coronavirus-casework#homeandrent
