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 soon as the tax software and the IRS determine how to handle and reprocess any returns previously filed.
EXPANDED CHILD TAX CREDIT
The American Rescue Plan Act greatly expands the Child Tax Credit by allowing households with children to claim up to $3,600 for younger children or $3,000 for children age 6 or older. The full child tax credit will be available to individuals who earn up to $75,000 and couples earning up to $150,000.
STUDENT LOAN DEBT FORGIVENESS TAX FREE
While the Act does not include student loan debt forgiveness, it does contain a provision that any student loan forgiveness passed between December 30, 2020 and January 1, 2026 will be tax free. Under current IRS rules, loan forgiveness must normally be included as taxable income.
EVICTION AND FORECLOSURE MORATORIUMS REMAIN–FINANCIAL ASSISTANCE INCREASED
The current eviction and foreclosure moratoriums, which end March 31st, will not be extended under the plan but additional funding is being made available to provide relief to those behind on mortgages, rent, and utility bills.
INCREASED FOOD AID
The Act extends the 15% increase in Supplemental Nutrition Assistance Program (SNAP) benefits through September 30, 2021. and provides $1.15 billion to states for SNAP administration, as well as $1 billion for nutrition assistance programs. The Act also allocates $490 million to the United States Department of Agriculture (USDA) to increase the amount of the cash-value vouchers under the Women, Infants and Children Program (WIC). In addition, the plan allocates $390 million to increase participation in WIC.
SCHOOLS AND CHILDCARE BLOCK GRANTS
education. This money will be used to reduce class sizes, improve ventilation, purchase personal protective equipment, and fund other steps to help schools reopen safely.
HELP FOR BUSINESSES
A new program for restaurants and bars allocates $25 billion in pandemic assistance grants. The grants can provide up to $10 million per company with a limit of $5 million per physical location and funds may be used to cover payroll, rent, utilities and other expenses.
PANDEMIC RESPONSE
About $50 billion will pay for additional COVID-19 testing and contact tracing, and $19 billion will help increase the size of the public health workforce. About $16 billion will fund vaccine distribution and supply chains.
STATE AND LOCAL GOVERNMENT
The American Rescue Plan Act includes $350 billion in aid to states, cities, tribal governments, and U.S. territories. These funds are designated to help replace lost tax revenue due to the pandemic.
MINIMUM WAGE
Following a ruling by the Senate parliamentarian that the minimum wage hike to $15 an hour could not be included in the legislation under budget reconciliation, that measure was removed from the Act.
 The Act sets aside $130 billion for grades K-12
Lisa Grossman Ben-Tal is a Certified Public Accountant based in the Los Angeles area. You can reach her at (310) 922-6913 or by email at lisa@grossmanbtcpa. com. For more information, go to http://www. grossmanbtcpa.com/. Ms. Grossman Ben-Tal is a member of the Apartment Association of Greater Los Angeles and has Executive Director Yukelson’s tax advisor for many years.
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