As we talked earlier this month about the new Unemployment and Tax Breaks changes for the year 2021, we continue looking into more tax breaks for this year.

The American Rescue Plan also extended the initial CARES act unemployment benefits. The new plan extended the number of benefit weeks for individuals aged 50-76, as they may not be able to return to work safely. The plan will maintain the $300 per week the previous act provided. The biggest difference is that the Rescue Plan extends the benefits weeks from 24 weeks of aid, to 54 weeks of aid. 

Another change and tax breaks from the new plan is the expanded child tax credit. It will now be paid out monthly, which is going to be a major IRS challenge. The biggest challenge is that the IRS will need to account for proof of dependents each month, proof of projected income, and filing status. The current administration plans to have this all worked out by July; however, many are in disbelief that this new tax credit and monthly payout will work as it took the IRS two years to work out the payment system with the Affordable Care Act. 

Policymakers plan on revisiting and evaluating these changes, to see if the longevity of these benefits and tax breaks are cost-effective.