MomsRising and the #CareCantWait Coalition came together with U.S. Speaker Nancy Pelosi and experts on April 8, 2021 to get you information on how to get the new benefits available due to the recent passage of the American Rescue Plan (ARP).
Why? Polls are showing that the majority of people in our nation don’t know what’s in the American Rescue Plan for them -- and in order to achieve the goal of the ARP actually helping to decrease child poverty by 50%, people need to know about how to get the new benefits.
So, when you scroll down below, you’ll get some specifics about what’s in the American Rescue Plan for you, including: How to access the new Child Tax Credit, EITC, and stimulus checks; Ways to get expanded unemployment benefits; What’s happening with child care assistance; Who qualifies for pandemic leave and expanded home- and community-based services; and, How to get access to expanded healthcare coverage.
One specific example of what we need to get the word out about is: As of a couple weeks ago, due to the recent passage of the American Rescue Plan, you can get $3,600/year for kids 0-5 and $3,000/year for kids 6-17 through the updated Child Tax Credit… even if people aren’t earning income, but to get the check people (even with zero income) have to file taxes by May 17th unless you file an extension.
Of course, the more people who get this information, the better! So feel free to forward the link to this blog to friends, family, and colleagues! Thank you for working to build a nation where everyone can thrive.
How to claim the expanded tax credits (CTC, EITC and more) and get the stimulus payment from the American Rescue Plan
Amy Matsui, Director of Income Security & Senior Counsel, National Women’s Law Center
There are four important tax credits in the American Rescue Plan Act (ARPA) that you should be aware of:
For tax year 2021, the ARPA increases the amount of the Child Tax Credit (CTC) from $2,000 per child under age 17 to $3,600 per child under age six, and $3,000 per child ages six to 17. In addition, the ARPA makes the CTC fully refundable, even for families with no earned income. And, starting in July, the IRS will make one or more advance payments of the credit available (totaling up to half of the 2021 CTC amount).
For tax year 2021, the ARPA makes the Earned Income Tax Credit (EITC) more generous for working people who do not claim children for the credit. It also makes more workers eligible to claim the credit.
For tax year 2021, the ARPA also expands the Child & Dependent Care Tax Credit (CDCTC), which provides tax assistance for families with out-of-pocket child care expenses. The ARPA makes the CDCTC refundable and increases the amount of the credit to a maximum of $4,000 for one child and $8,000 for two or more children.
Finally, the ARPA authorizes a third round of Economic Impact Payments (aka stimulus payments). (Technically, the stimulus payments are structured as a refundable tax credit.) Families will receive direct payments of up to $1,400 per eligible person, including children and adult dependents. Importantly, these payments include individuals with Social Security Numbers in mixed-status families. More than 156 million payments have already gone out since March 12!
Even though some of these credits don’t kick in until you file your taxes next year, the most important thing you can do right now is file a 2020 tax return by the May 17 deadline (unless you request an extension).
This will ensure that you receive the full amount of the first two stimulus payments that were paid out in 2020.
Filing a 2020 tax return will also ensure you receive the full amount of your third stimulus payment from the ARPA. The IRS may have already sent you a third stimulus payment based on your 2019 tax return. But if your income dropped in 2020 so that you qualify for a larger stimulus, the IRS will send you a second payment once your 2020 tax return is processed.
It will also provide information for advance Child Tax Credit payments in 2021.
And you may be eligible to claim the EITC, CTC, the CDCTC or other tax credits for 2020 (and in some cases, for previous years)!
While this is a chaotic tax filing season, there is free help available. You can check the IRS website to see if there is a VITA site, where you can get help filing your taxes from trained volunteers, open near you. Your state’s 211 number may also have information about VITA sites in your community. You can also file your taxes for free online, with support from IRS-certified, trained volunteers, at www.GetYourRefund.org.
To claim the full 2021 CTC, EITC and Child and Dependent Care Tax Credit expansions under the ARPA, you will need to file a 2021 tax return in early 2022. In the meantime:
Beware of scammers pretending to be the IRS. The IRS will never ask you for personal information (like your Social Security Number, bank account, or a credit card number) over the phone, or by email, text or social media. The IRS also won’t threaten you with jail or lawsuits, or demand tax payments on gift cards.
Stay tuned for more information about advance payments of the Child Tax Credit in 2021. (Reminder: starting in July, the IRS will provide for one or more advance payments of up to half the 2021 CTC amount). The IRS is working out the details as we speak.
If you pay for child care or care for a family member with a disability so you can go to work, here are some things you can do to make claiming the Child and Dependent Care Tax Credit easier:
Keep track of your out-of-pocket child care expenses (check stubs, receipts, Venmo or electronic bank transfer records). You will need to tell the IRS how much you paid for the care of each eligible child (under age 13) or dependent with a disability in total, in 2021.
You will also need to provide the name and address of your child care provider(s). You will also need to ask your provider for a tax identification number or Social Security Number. You should know that if you ask for a tax ID, and they do not provide one, you can still claim the CDCTC.
While you can claim expenses from many different care arrangements (including a babysitter, family member or neighbor, nanny, child care center or family child care home, before- or after-school care, summer day camp, etc.), you cannot claim expenses if you paid them to your spouse, your child’s other parent, your child who is under age 19, or a dependent whom you claim on your tax return. And if you have a Dependent Care Assistance Plan (DCAP) at work, the expenses you can claim for the CDCTC will be reduced by the amount of your DCAP benefits.
How to get the new childcare benefits in the American Rescue Plan
Myra Jones-Taylor, Zero to Three
- Let’s talk first about what was included in the ARP for child care. The bill included $15 billion in additional funding for the Child Care and Development Block Grant to support increased access to care subsidies for working families. This builds on an additional $10 billion that CCDBG received in the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) in December.
- It also included $24 billion in a Child Care Stabilization Fund for states to provide direct support to child care providers, who have faced incredible financial turmoil as a direct result of the pandemic. In fact according to a December survey by NAEYC – more than half of all child care centers said they were losing money every day they remained open due to increased costs and reduced enrollment.
- For families who are struggling to find affordable child care, increased access to child care subsidies might make the difference between being able to continue working or having to leave the workforce altogether.
- For providers, the additional funds they will have access to might mean the difference between being forced to close permanently – increasing our child care supply crisis – or remaining open to serve their communities.
- We are incredibly grateful to Congress for providing this much needed lifeline to the child care system – it will help avert a collapse of the sector that would have devastated children, families, providers, and our broader economy.
- For families looking to access help paying for child care, the first step is to make sure you are eligible. Eligibility is determined by states, and will vary state-to-state. In regular times, families with incomes below the 85th percentile of their state median income are eligible to receive care subsidies (under federal law), although many states set eligibility much lower. In real dollars, this federal eligibility standard translates to about $57,000 a year for a family of three, but with lower state eligibility levels, access to subsidies is limited on average to families with maximum incomes of less than $38,000.
- And these funds are flexible to what type of care families have chosen. Take, for example, Family, Friends and Neighbor Care (or FFN). It’s an integral part of the child care system. According to a recent NWLC report about this type of child care during and after COVID-19, 51 percent of FFN providers surveyed reported that they receive funding (subsidies), other than payments from parents or other individuals, to provide child care. But Spanish-speaking providers were about half as likely as English-speaking respondents to report receiving outside financial support to provide care.
- ARP funds are available to FFN providers, and ca help support parent choice in type of care. If paired with future dollars and long-term solutions, ARP can help build supply, particularly for infants whose care tends to cost more.
- Congress has waived this income eligibility limit during the COVID-19 crisis for health sector employees, emergency responders, sanitation workers, and others deemed essential by the states.
- California, for example, is using a portion of the emergency CCDBG funds it received under CRRSA to extend emergency child care vouchers for essential workers, as well as children at-risk of abuse or neglect and children with disabilities or special healthcare needs.
- The best thing families can do to check their eligibility and whether there are funds available is to reach out to their local child care resource and referral agency, or to the agency in their county that handles child care subsidies, whether a welfare office, a department of social services, or a human services office.
- One of our key partners, Child Care Aware of America, provides a convenient search tool for families looking for a resource and referral agency near them at https://www.childcareaware.org/resources/ccrr-search-form/.
- For providers hoping to access a child care stabilization grant, there will also be variance state-by-state. However, providers of all types should keep in mind several key points as they await more information from their state lead agencies.
- Providers need not have previously received funding under CCDBG to receive a subgrant under the child care stabilization fund.
- In order to qualify for a grant, providers must be either open and available to provide child care services, or closed due to public health, financial hardship or other reasons stemming from the pandemic emergency.
- Awards will be determined based on current operating expenses, including additional costs associated with providing or preparing to provide services during the public health emergency, and should be designed to cover sufficient operating expenses to ensure providers can operate continuously during the grant period.
- The ARP legislation requires state lead agencies to operate a website for providers to apply for a subgrant. In addition to the information above, providers must also certify that upon receipt of the grant and for the duration of its receipt, they will:
- Pay each employee their full compensation and benefits and not reduce that compensation or involuntarily furlough an employee.
- Provide copayment and tuition relief to families enrolled in the program to the extent possible, giving priority to families struggling to make payments.
- Finally, providers who receive funds under the stabilization fund, must use those funds for at least one of the following purposes:
- Paying personnel costs, including premium pay for their employees;
- Covering the cost of physical space, including rent or mortgage payments, utilities, facility maintenance or improvements, and insurance cost;
- Purchasing PPE, cleaning supplies, equipment or training and professional development related to health and safety;
- Mental health supports for children and employees; and
- Other goods and services necessary to maintain or resume operations.
- Providers can also use funds to pay back expenses or debts incurred in response to the COVID-19 emergency prior to the receipt of funds.
- With many parents concerned about COVID exposure in care settings, these relief funds support health and safety measures in a variety of settings.
- The most immediate next step providers should take as they await more information is to reach out to their lead agency on a timetable for setting up the application website and subgrant process.
- Before we close, I think it is critical to note again that while this funding was absolutely necessary to prevent a total collapse of the child care sector, it does not get us to where we need to be in terms of a care economy that works for parents, providers and children.
- In the weeks and months to come, we look forward to working with Congress and the Administration to secure increased appropriations for programs like CCDBG that support families access to affordable care, while also pushing for permanent, comprehensive changes to the child care system that would ensure all families have access to quality care in the setting that best meets their needs, and that the early educators who care for children are compensated in a manner more in line with the critical importance of the work they do.
- This will be particularly important for many families who might still struggle to afford care but make too much money to qualify for subsidies under CCDBG. If we consider the broader range of low- and moderate-income families who would benefit from additional support paying for child care, just 4 percent of families with incomes below 150 percent of their state’s median income received a subsidy to support their access to child care.
- Child care is the foundation upon which the rest of our economy sits, and for many children helps shape their lifelong developmental trajectory. The pandemic revealed just how essential child care is as a public good – and now it’s time for our leaders to fund it as such. We thank Speaker Pelosi for being a long time champion for these issues and look forward to shaping a stronger, more equitable future for all our young children and families.
The American Rescue Plan Unemployment Questions and Answers
Andrew Stettner, Senior Fellow, The Century Foundation
The COVID19 pandemic unleashed a historic wave of unemployment caused by business closures, the lack of child care and repercussions. Powered by big expansions in the CARES Act, Unemployment Insurance has been the first line of defense for families seeking to keep their finances intact after the unexpected loss of income. The American Rescue Plan ensured that critical expanded programs would continue through the end of the deep pandemic winter and into September 2021. Moreover it includes critical new provisions to solve unintended problems and start fixing an outmoded system that led to major delays in getting out vital aid.
Individuals can continue receiving pandemic unemployment benefits without filing a new UI application
The first stop for any unemployment benefit program is your state unemployment office regardless of whether you are applying for federal or state benefits. You can find your office here https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/Find-Unemployment-Benefits.aspx
Individuals initially eligible for standard unemployment benefits will now be able to receive up to 53 weeks of PEUC benefits (up from 24) if they are long term unemployed.
Workers who are ineligible for regular benefits but are unemployed due to COVID19 (like freelance/gig workers and those who lost child care) can continue to receive PUA benefits. The maximum duration of PUA benefits was increased from 50 to 79 weeks.
Regardless of what programs that individuals are on, benefit payments will be increased by $300 per week through September 6, in the form of Federal Pandemic Unemployment Compensation (PUC)
In most cases workers will not have to reapply to get these extra weeks. They can simply continue to file weekly claims as they have over the last year
American Rescue Plan significantly cuts back surprise unemployment tax bills
Unemployment benefits are typically taxable, and families faced a huge surprise tax bill of thousands of dollars this year (even though many workers, like those on PUA, were not even allowed to withhold taxes). The American Rescue Plan exempted the first $10,200 in unemployment income from 2020 from any federal income taxes, which translates to an average tax savings of $1,000 (available to those with less than $150,000 in household income.)
The good news is that this tax saving should be largely automatic. The IRS has assured that those early birds who had already filed their unemployment taxes before the ARP passed will have their taxes adjusted automatically before their return is processed. (Although families can file an amended return if they omitted certain credits if unemployment artificially inflated their income) Those who have not filed taxes yet should reduce the unemployment income on their official 1099-G by $10,200.
Workers should keep an eye out for new benefits and requirements
States are just now setting up an important new program first passed in December continued by the American Rescue Plan—the Mixed Earners Unemployment Compensation program. This program is for those who are on traditional benefits but would be getting more on PUA based on their freelance income (like a professional musician paid for gigs who also teach once a week at a school). These individuals will soon have the chance to apply for an additional $100 per week in benefits provided they can document $5,000 in net self-employment income during the tax year before they first lost work (typically 2019).
Those on PUA need to be aware of another key rule. In 2021, everyone who is still receiving PUA (regardless of when they started) will have to submit documentation of their pre-COVID employment loss. This could include 2019 tax returns, paystubs or documentation of a withdrawn job offer. PUA recipients will have 90 days to meet this requirement, once their state notifies them of the procedures.
Understand the Benefit Year Fix
Many on unemployment are seeing ominous looking notes saying that their “benefit year is ending.” Don’t panic. In normal times, unemployed individuals are given 1 year to collect unemployment benefits, after which they can reapply and be eligible again. Since the pandemic extensions in the American Rescue Plan total up to more than 1 year, there is a potential overlap between an additional year of state unemployment benefits and the CARES Act extensions.
Most on American Rescue Plan benefits won’t have to worry about this overlap, including almost all of those on PUA and those who have not worked between the time they were first out of work and now. Those who have worked for multiple weeks are likely to have to reapply for state benefits, and may be eligible for a new benefit year. In many cases the new rate of state benefits will be lower because it’s based on a shorter work history. The American Rescue Plan fixes this problem -- ensuring that any workers facing a benefit cut of more than $25 will be able to stay on PEUC benefits. This is one of the more complicated parts of the law--please check your state unemployment website carefully.
There’s a lot more in the American Rescue Plan for the unemployed, including extension of other smaller programs like short-time compensation and Extended Benefits. And, Congress set aside $2 billion for new federal and state IT improvements to fix problems that have led to long delays in benefits, including tens of thousands still waiting on pending appeals. Put simply, the American Rescue Plan locks in aid for 18 million plus American on one form of unemployment benefits or another through September 6th. The work is not done--the economy won’t be back to normal by then, so additional assistance will be needed. And, it’s time for Congress to learn the lessons of the pandemic and put in long-term structural fixes that won’t require emergency legislation every time there is a crisis.
Healthcare and Home and Community-Based Services in the ARP
Nicole Jorwic, Senior Director of Public Policy, The Arc of the United States
How do I get access to healthcare? Are there any new HCBS benefits in the ARP that I can now access?
The COVID pandemic has highlighted the urgent need for healthcare coverage. As people all over the country lost access to their employer-sponsored health insurance, the need for expansion of access was clear. For people with disabilities and aging adults, in addition to traditional healthcare, there is a huge need for other supports called home and community-based services (HCBS). These services can include things like day programs for older adults and people with disabilities, employment supports, assistance with getting around the community, in home-support for personal care and assistance. The need for these home and community-based services was also highlighted during the pandemic, as HCBS are the alternative to the large congregate settings, such as nursing facilities and other institutions that were shown to be extreme public health hazards for people with disabilities and aging adults.
Healthcare in the ARP:
Significant premium subsidies for people purchasing health coverage on the Marketplaces
- The cost of coverage through the Affordable Care Act (ACA) marketplace was reduced for all individuals eligible for subsidies. Individuals making between 100-150% of the federal poverty level (FPL) will pay no premiums. Eligibility for tax credit subsidies was also expanded. For tax years 2021 and 2022 households above 400% FPL are now eligible for those subsidies.
- The ARP also provides eligibility for marketplace coverage for individuals who receive unemployment compensation during 2021.
Provides financial incentive for states who have not expanded Medicaid under the ACA
- The ARP provides a temporary incentive of a 5% increase for two years in the Federal share or Federal Medical Assistance Percentage (FMAP) to states to support expansion of coverage. The FMAP increase is immediately available to states. States choosing to expand will be required to maintain coverage levels.
What You Can Do?
- Go to: https://www.healthcare.gov/apply-and-enroll/get-ready-to-apply/
Enter your state and other information requested to get ACA marketplace coverage, and see what subsidies are available based on income.
- If you live in a state that has not expanded Medicaid, work with advocates to support the expansion and bring additional Federal dollars to your state.
Home and Community-Based Services (HCBS) in the ARP
Significant Federal investment in Medicaid Home and Community-Based Services (HCBS)
- The ARP includes $12.7 billion for one year of funding to strengthen and expand access to Medicaid Home and Community-Based Services (HCBS).
- HCBS funding can be used to provide services to people currently on the waiting lists, better pay for the direct care workforce, and to reopen programs, many of which have been closed for a year.
What You Can Do?
- If you have a family member who is a person with disability and aging adult make sure that you know the HCBS that may be available.Go to: https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915c/index.html Learn more about what services are available and how to become eligible in your state.
- Work with advocates in your state to ensure that states are expanding access to HCBS as an alternative to large congregate settings. Older adults want to age safely at home, and people with disabilities want to remain part of their communities.
How to get the pandemic leave in the American Rescue Plan
Dawn Huckelbridge, Director, Paid Leave for All
Paid Leave for All is a growing campaign of organizations working to win paid family and medical leave for all working people (we especially want to give thanks to MomsRising and all our Care Can’t Wait partners, and kudos to A Better Balance who developed the legal summary below. They maintain a free and confidential helpline you can call for more assistance: 1-833-NEED-ABB).
At Paid Leave for All we want all people to have access to at least 12 weeks of paid leave to bond with a new child, address a personal or family illness, or handle needs that arise from military deployment. The United States is one of the only countries in the world that doesn’t guarantee any form of paid leave, which meant that when the pandemic hit, we were unprepared. Four in five workers had no access to paid family leave; more than 30 million workers, particularly on the frontlines, didn’t have access to a single day of paid leave.
But the good news is that one of the first things Congress did when COVID struck was pass our country’s first national paid leave policy, in a historic, bipartisan vote. In March 2020, the federal government enacted landmark emergency paid leave through the Families First Coronavirus Response Act (FFCRA). This law gave millions of workers new rights to paid, job-protected leave for a range of COVID related needs, paid for by the federal government through tax credits to employers. The FFCRA emergency paid leave saved jobs and saved lives, preventing more than 15,000 COVID cases per day. The program expired in December 2020, but Congress extended the tax credits for both employers and self-employed people through March 31, 2021.
Then in March of this year, President Biden signed the American Rescue Plan. Like the December package, the ARP does not reinstate employees’ rights to take paid leave from work under the law. However, it does provide tax credits to cover the costs of providing expanded emergency paid leave through September, 2021. Like the previous credits, these are available to private sector employers with fewer than 500 employees and to self-employed workers; these credits are also available to state and local governments. The ARP also grants many federal employees and self-employed workers the right to emergency paid leave through September.
Our small business partners especially have shared what a lifeline these provisions were. According to Main Street Alliance member Marcia Saint Hilaire-Finn from Bright Start Early Care in Washington, DC:
“Having access to this paid leave meant I could continue to pay my entire staff—18 people—even though they couldn’t work because of the public health measures we took. My employees collected their checks and I could feel confident that making the right decision to protect others wouldn’t mean my employees would miss rent or food on the table.”
Tax credits for employers are available for private sector employers with fewer than 500 employees and state and local government employers for covered costs of providing leave for a total of up to 14 weeks for workers who:
1. have coronavirus symptoms and are seeking a medical diagnosis;
2. are subject to a federal, state, or local quarantine or isolation order related to coronavirus;
3. have been advised to self-quarantine by a health care provider due to coronavirus-related concerns;
4. need to care for their child because their child’s school or childcare has been closed or childcare is unavailable due to coronavirus;
5. are caring for someone who is subject to a federal, state, or local quarantine or isolation order related to coronavirus, or who has been advised by a health care provider to self-quarantine due to concerns related to coronavirus;
6. are seeking or waiting for results of a coronavirus test or diagnosis due to exposure or at their employer’s request (even if they are not symptomatic); or
7. are obtaining or recovering from a coronavirus vaccination.
If your private-sector employer has fewer than 500 employees: Your employer is no longer required by federal law to provide paid leave but if they do provide paid leave for covered purposes, they can get a tax credit to cover the full cost. If you have a covered need, you can ask about leave and let your employer know about the tax credit. In effect, employers can choose to extend FFCRA protections at no cost to themselves.
If your employer is a state or local government: Your employer is no longer required by federal law to provide paid leave. However, if they do provide paid leave for covered purposes between April 1 and September 30, 2021, they can get a tax credit to cover the full cost. Once again, if you have a covered need, you can ask about leave and let your employer know about the tax credit.
If your employer is the federal government: You may have the right to COVID-19 related paid leave from your employer.
For all employees: You may still have important rights under state or local paid leave laws. You can call ABB’s helpline at 1-833-NEED-ABB.
For self-employed workers: You still have the right to tax credits to cover leave for covered purposes.
And the great news is we have the opportunity coming out of this crisis to make meaningful reforms that will transform our policies and help people’s lives. We look forward to working with leadership, Congress, and the Administration to pass a permanent and comprehensive paid family and medical leave law this year.
We all have a stake in ensuring people do not spread illness when they are sick and recovering, that no one ever has to choose between their family and their paycheck. We need a sustainable paid leave policy in place so that families and businesses are never scrambling for piecemeal solutions when a caregiving need arises or a crisis strikes.
If we want to build back better, paid leave has to be a part of our infrastructure and included in the economic recovery plan, as key as roads and bridges to helping people get to work and stay employed. The American Jobs and Families Plans are fundamental to creating a resilient economy grounded in racial and gender equity. We can and we must pass paid leave now.