President Biden’s Stimulus Plan: What You Need to Know

The U.S.’s 46th president Joe Biden was inaugurated on 20 January – a momentous occasion for the country. While the new Commander in Chief already faces many challenges, one of the more pressing ones is getting his American Rescue Plan through Congress.

The $1.9 trillion coronavirus relief plan is a vital lifeline for millions of Americans, which includes emergency measures to help the economy recover from the pandemic and lift the GDP by 0.7%. This includes plans for stimulus payments to middle- and lower-class households.  Here’s what you should know.

Will There Be Stimulus Relief Under President Biden?

President Joe Biden announced his stimulus plan before his inauguration, and it is set to be one of the first bills to be discussed in Congress under the new administration. The realization of the bill will require a lot of borrowing on the part of the government, which is opposed by the more conservative members of Congress.

Another potential hitch that could delay the stimulus payments is the fact that the bill coincides with Donald Trump’s impeachment hearing. This clash has the potential to split the focus of Congress and thus prolong the process of passing the bill.

How Will the Biden Stimulus Differ from Previous Stimulus Checks? 

Pandemic stimulus checks aren’t a new thing introduced by the new regime. The Trump administration introduced them in April last year as part of their emergency measures.

President Biden’s American Rescue Plan is expected to rather build on this existing $4 trillion plan that Congress had already assigned to the pandemic under Donald Trump. Biden’s plan is to expand it with bigger stimulus payments and looser eligibility requirements.

The $1.9 trillion from the Biden Stimulus Plan will be divided into three parts:

1. Over $1 trillion relief for Americans through stimulus payments and unemployment insurance benefits
2. $400 billion directed towards battling Covid-19 while opening schools, including a universal vaccination program and increased testing
3. $440 billion aid for struggling communities and businesses. 

This will be the third round of stimulus checks that American citizens have received since the global economic crash caused by the Covid-19 pandemic. The first stimulus was $1,200 per adult and $500 per child in April, while the second one was $600 per adult and child at the beginning of 2021 after Trump delayed signing the bill into effect. The Biden Stimulus is expected to be more than double the last payment, although this payment still depends on Congress.

The eligibility criteria for stimulus payments are also expected to be expanded, which will be explained in more detail below. The plan also aims to increase the Child and Earned Income Tax Credits. It also forms part of legislation to increase the federal minimum wage to $15 an hour, guarantee 14 weeks of sick and family medical leave for workers, offer grants and low-interest loans for small businesses, and earmark more funding for other types of aid.  

How Much Will the Biden Stimulus Checks Be?  

How much the Biden Stimulus check will be is dependent on whether Congress can push past expected Republican political blockades.

The Republicans are seeking a reduction of the total American Rescue Plan, which now stands at a stimulus payment of $2,000 per individual. 

According to experts, this latest stimulus is more likely to be $1,400 per person as a compromise between the Democrats and the Republicans. 

Who Will Qualify for a Biden Stimulus?

If you’re an American citizen or resident, earn under a set amount, and you are not a dependent on someone else’s tax return, you qualify for a Biden Stimulus.

The income threshold for the last stimulus payment was $75,000 for individuals and $112,500 for heads of households. For married couples that file jointly, the threshold was $150,000. If your income was above that, you would receive a reduced stimulus package. 

In this case, you’ll receive $5 dollars less for every $100 that you are over that threshold. There is however a ceiling limit where you won’t qualify for a stimulus package at all. This ceiling is normally around $10,000 above the threshold per individual.   

The income amount the IRS will use to judge your eligibility will be based on the income declared on your last tax return. 

Also note, previously children had to be under the age of 17 to qualify as a dependent, and adults with disabilities and students were excluded from the last stimulus payments. However, this is set to change with Biden’s plan, which will now include adult children that are dependents too.

Families with one immigrant parent – excluded from previous payments – will also now be eligible for a stimulus payment. 

How Soon Can Biden Stimulus Checks be Expected?

Unfortunately, experts predict that the Biden Stimulus won’t be arriving in your mail any time soon – it might even be months.

The American Rescue Plan first needs to pass through Congress – which is expected to happen between mid-February and mid-March – and then has to be signed by President Biden. This is if there’s no extensive debate in Congress over the bill and the plan receives some level of support from moderate Republicans and all the Democrats vote along party lines.

We can also look at how long it took the previous stimulus packages to be paid. The first stimulus payment in April last year took between two weeks and several months to be processed, while the second round only took a week. However, many Americans suffered through multiple delays due to incorrect account information at the IRS, so it’s important to make sure your account information is correct if you qualify for a stimulus payment.

With all this information taken together, experts predict this stimulus check might arrive around late February in the best-case scenario. Or, if Congress takes longer to pass the bill it might only be early April. If the Republicans block the Democrat-led bill, it can still pass under the budget reconciliation process, but this will delay the payments. 

Once the IRS gets the all-clear, they can start getting the payments into the hands of struggling Americans. The Biden Stimulus payment may be distributed via direct deposit, mailed checks, and prepaid debit cards. 

Conclusion

The stimulus aid is a vital part of the American Rescue Plan, especially for Americans and residents who are barely holding their head above water financially. 

The Covid-19 pandemic is not expected to abate any time soon, and it’s hard to predict how much longer the coronavirus relief program will be needed to help stimulate the U.S. economy. Under the Biden plan some aid programs will run until September this year, but whether that’s too long or too short remains to be seen.

Luckily, with the coronavirus vaccine already being deployed and plans to expand its distribution to all parts of the country, things might just start to get back to some sense of normalcy.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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