The House passed a $2.2 trillion scaled-back version of the Heroes Act last night. The vote was along party lines and represents the Democrats’ position in ongoing negotiations with Republicans on a another round of Covid-19 relief. While much of the news focuses on a second stimulus check, individuals and families could receive far more money from other provisions of the bill.
Here’s a list of some of the direct payments and other benefits individuals and families could receive under the Heroes Act if it became law. Because stimulus checks are part of the overall package, let’s begin there.
The revised Heroes Act includes a second round of stimulus checks, officially called Economic Impact Payments. The amounts are the same as the first round:
- $1,200 for individuals
- $2,400 for joint filers, and
- $500 for qualified dependents.
The income limitations are the same, although some eligibility requirements have been relaxed. For example, the age limitation on qualified dependents has been lifted, allowing full-time students below age 24 and adult dependents to qualify for the $500 payment. In addition, there is no limit on the number of dependents that would qualify.
The bill would continue the $600 per week Federal Pandemic Unemployment Compensation (FPUC) supplement through January 31, 2021. This payment is in addition to any state unemployment benefits one would receive. It’s also retroactive back to September 6, 2020. The result is approximately 21 weeks of enhanced unemployment benefits of $600 a week.
Earned Income Tax Credit
The Heroes Act expands eligibility for and the amount of the Earned Income Tax Credit (EITC). For those with no qualifying children it decreases the eligibility age from 25 to 19 and the upper age from 65 to 66. It also increase the amount of the credit. The result is that in 2020 the maximum credit increases from $538 to $1,487.
It also allows individuals to substitute their 2019 income for their 2020 income under certain circumstances for purpose of calculating the EITC. According to Speaker Pelosi, parents who lost all of their income in 2020 could still qualify for $5,920 in EITC based on their 2019 earnings.
Child Tax Credit
The House bill makes the Child Tax Credit fully refundable in 2020. Under current law, while the Child Tax Credit is $2,000, only $1,400 of that credit is a refundable credit. In other words, one can use the full $2,000 to offset tax liability. For those who don’t owe taxes, however, they would receive $1,400, not the full $2,000. Under the House bill, however, individuals could receive the full $2,000 as a refundable tax credit in 2020.
As a result, a family of four could receive $4,000 in refundable tax credits under the Heroes Act, rather than $2,800 under current law. In addition, the bill directs the Treasury Secretary to pay the enhanced credit in advance, meaning the payments could go out this year rather than after 2020 tax returns are filed next year.
Dependent Care Assistance
The House stimulus bill makes significant changes to the child and dependent care tax credit (CDCTC). The CDCTC is a tax credit that helps working families pay for childcare and the care for incapacitated spouses or adult dependents. The Heroes Act would expand the CDCTC for 2020 in several ways:
- Double the credit from $3,000 to $6,000;
- Increase the income phaseout threshold from $15,000 to $120,000;
- Makes the credit fully refundable; and
- Increases the maximum credit rate fro 35% to 50%.
SNAP Food Support
The bill makes several important changes to the Supplemental Nutrition Assistance Program (SNAP):
- Increases SNAP benefit levels by 15% and the minimum benefit for small households from $16 to $30 a month through September 30, 2021;
- Lifts mandatory work requirements for one year;
- Excludes FPUC benefits from the income eligibility calculation; and
- Prevents students from losing SNAP benefits due to work study or job loss.
According to Speaker Pelosi, the additional benefits would be worth more than $100 a month for a qualifying family of four.
Health Insurance Subsidy
The Heroes Act provides premium tax credits for those who have lost their job. For 2020 and 2021, individuals who have received unemployment compensation would have access to Affordable Care Act premium tax credits regardless of income. For individuals with higher incomes, premium tax credits would be calculated as if their income was 133% of the poverty level.
According to Speaker Pelosi, a parent losing his or her job would be eligible for these premium tax credits worth on average $1,386 per month.
Other Stimulus Provisions
There are countless other provisions in the Heroes Act that would directly or indirectly benefit individuals and families. These include:
- Rental Assistance: Authorizes $50 billion for an Emergency Rental Assistance program. This program would assist tenants with rent and utility bills. It would also help landlords cover their costs.
- Homowners Assistance: Authorizes $21 billion to help homeowners cover mortgage payments, property tax and insurance, utility bills, and other housing costs.
- State and Local Aid: Authorizes over $400 billion in aid to state and local governments.
- School Aid: Authorizes $225 billion to support educational needs.
- Student Loans: Continues and expands on student loan relief.
Status of Stimulus Negotiations
While news on a second stimulus check seems never ending, the Heroes Act would provide substantially more money to many individuals through other provisions of the act. In total, some individuals and families could receive payments and other benefits worth tens of thousands of dollars.
What a final package that’s signed into law will look like, however, remains to be seen. While it’s unlikely a final deal would include all of the above provisions, it likely will include many of them. The big question on the minds of many is when will an agreement be reached.
Speaker Pelosi and Secretary Mnuchin continue their negotiations in an effort to reach an agreement. On MSNBC today Pelosi said they are “coming to terms,” but specific language in the bill still needs to be resolved. Forbes will continue its ongoing coverage of this important issue as developments unfold.