This Chart Illustrates What Your Family Can Expect from the Stimulus Package

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This chart illustrates what your family can expect from the stimulus package, by Jessica Harper

Updated: Feb. 11, 2021
Originally Published: Feb. 11, 2021

With the introduction of stimulus checks and the extension of the child tax credit into monthly payments, American families may find themselves with a bit more financial breathing room. The impact of COVID-19 has been profound, taking countless lives and revealing a harsh reality: many Americans live paycheck to paycheck, teetering on the edge of financial hardship. The economic fallout from the pandemic has hit families hard, affecting everyone from educators forced back into classrooms to retail workers facing layoffs due to shuttered stores.

President Biden’s $1.9 trillion stimulus initiative, known as the American Rescue Plan, remains somewhat unclear for the average taxpayer. Fortunately, the Institute on Taxation and Economic Policy (ITEP) has delved into the details to clarify how much assistance American families can anticipate receiving.

According to the ITEP microsimulation model, a significant portion of the stimulus package consists of cash payments intended for low- and middle-income households. Unlike previous rounds of economic relief that primarily targeted businesses, this new package shifts focus toward family support. While experts have discussed the financial relief available, the specific implications for individual households have been less transparent.

ITEP analyzed the data to assess the potential impact across different income levels, providing average figures for what families might receive once the package becomes law. It’s crucial to note that these figures are averages—some families may receive more, while others may receive less.

For families earning less than $21,300 annually (or about $10,900 per partner), the expected average cash payment is $2,210, along with $1,060 from the child tax credit and $320 from the earned income tax credit. Families with an average income of $30,500 could see $2,460 in cash payments, $820 in child tax credits, and $60 in earned income tax credits. Households with an income of $51,500 would receive about $2,690 in cash payments, $660 in child tax credits, and $20 from earned income tax credits.

As household income increases, the stimulus amounts decrease significantly. For households earning $85,000, the expected cash payment is $3,000, with child tax credits of $620 and $10 in earned income credits. At the highest income tier of $1.8 million, the anticipated benefits drop to just $40 in cash payments, $10 in child tax credits, and no earned income tax credits.

It’s essential to remember that these figures are averages, and individual circumstances, such as the number of dependents, will affect the final amounts. Some families may qualify for the child tax credit, while others with children over 18 might not benefit from certain aspects of the plan. This chart serves as a general guideline for how the Biden administration aims to distribute funds to American families.

For more detailed information, check out ITEP to explore their findings and charts.

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Summary:

The American Rescue Plan aims to provide significant financial support to American families, particularly those in low- and middle-income brackets, through direct cash payments and expanded tax credits. The Institute on Taxation and Economic Policy has outlined expected benefits based on income levels, emphasizing that these figures are averages and individual circumstances will vary. The new stimulus package represents a shift from previous relief efforts focused on businesses to more direct aid for families.