Let’s find a tax preparation office for you

or

Information regarding browser or device support

Oh no! We may not fully support the browser or device software you are using!

To experience our site in the best way possible, please update your browser or device software, or move over to another browser.

 Close
COVID-19 IMPACT

Coronavirus Economic Relief Package of December 2020: What You Need to Know

Mark Steber Chief Tax Information Officer Published On December 22, 2020

Share

UPDATED ON: December 28, 2020

The much-anticipated emergency COVID-19 economic relief package was signed into law on December 27, 2020, after leaders of both parties in the U.S. Congress, along with the White House, reached an agreement on several pro-taxpayer provisions of the omnibus package.

Provisions of the bill include a new economic impact payment, the extension of additional unemployment benefits, additional monies for certain workers, and a safe-harbor consideration for taxpayers who qualified for the Earned Income Tax Credit (EITC) in 2019.

Currently, the main elements of the bill expected to impact taxpayers are as follows:

Second stimulus check / EIP payments

  • According to the U.S. Treasury Department, they will start processing these payments very soon - as in the next few weeks - to eligible taxpayers
  • These payments will be:
    • $600 per individual taxpayer and $1,200 per couple (phasing out at $150,000 for Married Filing Jointly and $75,000 for all others).
    • Individuals earning up to $87,000 and couples earning up to $174,000 will receive some form of payment. Individuals who earned up to $75,000 in 2019 will get the full amount of $600 and couples that earned up to $150,000 will receive $1,200.
    • $600 for each qualifying child dependent with details coming soon
  • Payments will also now be made to certain households that include taxpayers with Individual Taxpayer Identification Numbers (ITINs)

 

Extended unemployment compensation

  • An additional $300 per week through March 14, 2021 for those receiving unemployment benefits
  • Extends the Pandemic Unemployment Assistance (PUA) covering:
    • Self-employed
    • Gig workers
    • Other non-traditional workers
  • Pandemic Emergency Unemployment Compensation (PEUC) program which provides extra weeks of unemployment after state benefits are exhausted
  • Increases allowed time to collect regular state unemployment, PEUC, and PUA to 50 weeks
  • Provides extra $100/week for certain workers with both a job and self-employment (SE) income but their base for unemployment benefits doesn’t include SE income

 

New considerations for EITC taxpayers with lookback provision

  • Special “lookback” for EITC and Child Tax Credit (CTC)
    • Allows taxpayers to use 2019 earned income amount to determine eligibility for 2020 EITC and Additional Child Tax Credit (ACTC)
    • Allows taxpayer to pick the more tax beneficial income year and use that to compute 2020 EITC and CTC

 

A host of other provisions are embedded in the very comprehensive bill including future changes to the Extender tax provisions, small business provisions, charitable donation provisions and many more. You can read the entire bill here. We’ll continue to monitor for updates on how the IRS will implement many key elements of this legislation.

Got questions? Book an appointment with a Jackson Hewitt Tax Pro and they’ll be happy to help.

 

 

About the Author

Mark Steber is Chief Tax Information Officer, responsible for key initiatives that support overall tax service delivery and quality assurance. Mark also serves as a Jackson Hewitt liaison with the Internal Revenue Service, states, and other government authorities. With over 30 years of tax experience and deep knowledge of the federal and state tax codes, Mark is widely referenced as an expert on consumer income tax issues, especially electronic-tax and tax data-protection issues.

View Mark's LinkedIn Profile Jackson Hewitt Editorial Policy

Related articles

Coronavirus Unemployment Benefits and the COVIDTRA 2020

UPDATED ON: December 23, 2020

In late December 2020, Congress passed the Omnibus Spending Bill which included the COVID Tax Reform Act of 2020 (COVIDTRA 2020). It’s an extension to the CARES Act  designed to provide additional help to protect businesses and individuals from the economic effects of the Coronavirus.

View more
by Jo Willetts, EA | April 20, 2020

Covid-19 Unemployment & Tax Relief for Self-Employed, Freelance, and Gig Workers

UPDATED ON: December 23, 2020

Traditionally, freelancers and gig workers have been unable to claim unemployment benefits. Independent contractors and their clients don't pay into state unemployment funds by default. However, with the unprecedented situation that the COVID-19 pandemic has created, self-employed workers who otherwise wouldn't normally qualify for unemployment may now be eligible for payments.

View more
by Mark Steber | July 8, 2020

Coronavirus Relief for Small Businesses Under the CARES Act

Shutting down nonessential businesses may have been necessary to slow the coronavirus, but it’s nonetheless leaving staggering economic hardship in its wake. Recognizing the impending financial crisis, especially to small businesses, Congress passed two important bills to provide economic relief. The first was the CARES Act in March 2020. The second was the Paycheck Protection Program and Health Care Enhancement (PPPHCE) Act on April 21.

View more
by Mark Steber | May 4, 2020

Why Jackson Hewitt®?

We see you

Our Tax Pros will connect with you one-on-one, answer all your questions, and always go the extra mile to support you.

We got you

We have flexible hours, locations, and filing options that cater to every hardworking tax filer.

We fight for you

We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years.