10 Potential Highs And Lows Of Biden’s Stimulus Package

6. Earned Income Tax Credit

President Biden is also calling for an expansion of the EIT, the earned income tax credit, for one year. The maximum EITC ranges from $538 to $6,660 depending on your income and how many children you have for 2020 tax credits, while for 2021 they will range between $543 and $6,728.

The limits work like this. For those without children, your earned income and adjusted gross income, also known as AGI, must be less than $15,820 for singles and $21,710 for joint filers in 2020, and $15,980 and $21,920 for 2021. For those who are married and have three or more children, their AGI can be as high as $56,844 in 2020 or $57,414 in 2021.

Knowing all of this, President Biden wants to eliminate the age cap for older workers, raise the maximum credit for childless adults to $1,500, and raise the credit’s income limit for singles to $12,000. He wants to avoid a reduction of the EITC for people who will have lower earnings in 2021 because of the pandemic.

7. Premium Tax Credit

The coronavirus pandemic has further established the need for everyone to be covered by a health insurance plan. Lower-income people can rely on the premium tax credit to pay for health insurance purchased through the marketplace.

Say you go to healthcare.gov to buy insurance. In order to lower your monthly payments, you can have the credit paid in advance directly to the health insurance company and then attach ARS form 8962 to your tax return to compute your actual credit, listing any advance subsidy paid to the insurer and, finally, reconcile the two figures.

President Biden thinks this plan can be made more attractive by increasing the value of the credit. People would not have to pay more than 8.5% of their income for coverage.