On Saturday, March 6, the Senate passed the American Rescue Plan Act, the wide-ranging COVID-19 relief package that has been under discussion since President Biden’s inauguration.

The package includes a number of extensions to existing relief programs that are set to end this month, as well as another round of stimulus payments and changes to tax rules that could save millions of freelancers some much-needed cash. Here are the main takeaways:

• A $1,400 stimulus payment for every individual and dependent (including adult dependents). Income caps have been changed since the last $600 payment was sent out; the payment will begin to phase out at $75,000 annual income for individuals ($150,000 for married filers and $112,000 for heads of household). Individuals who earn over $80,000 ($160,000 for married filers and $120,000 for heads of household) will not receive any payment.
• PUA, as well as the $300/week FPUC payment, is extended through September 6.
• The $100/week mixed earner unemployment compensation payment (MEUC), for those who receive at least $5,000 in 1099 income but are receiving traditional UI benefits because of W2 income, is also extended through September 6. This is a new system that states must opt into; many states have yet to implement it and two (Idaho and South Dakota) have opted out.
• Any student debt forgiven between December 31, 2020, and January 1, 2026, will now be tax-free. Usually, any forgiven debt is treated as taxable income. It is believed this is to make way for President Biden to use an executive order to forgive some amount of federal student debt.
• Up to $10,200 in UI and PUA benefits received in 2020 will not be taxed. If you received benefits above that threshold, that income will be taxed.
• The Child Tax Credit is increased from $2,000 per eligible child to $3,000 for children ages 5-17, or $3,600 for children under 5.
• The Child and Dependent Care Credit is substantially increased to a maximum of $4,000 for 1 dependent ($8,000 for two or more). This credit will cover 50% of eligible care expenses for children or other dependents, and is fully available to households making up to $125,000, after which it phases out. This change is only for the 2021 tax year.
• $27 billion is added to emergency rental assistance as administered by the Coronavirus Relief Fund, which was set up under the CARES Act. $10 billion is added for mortgage assistance for homeowners.
• An additional $1.25 billion is added to the Save Our Stages funding passed in December, and a $28.6 billion restaurant revitalization fund is established to provide grants to struggling restaurants of up to $5 million each. The Small Business Administration will handle these programs; it has not yet begun distributing funding for independent entertainment venues as provided in December.

It’s important to note that the income threshold for stimulus payments is based on the most recent information the IRS has on file, so if your income dropped last year and you have yet to file your 2020 taxes, we recommend you file your taxes ASAP.

And note that the tax waivers refer to federal taxes only. States have differing laws about taxing unemployment benefits (and some states have already moved to waive taxes on 2020 UI/PUA income), so be sure to check with your state taxation department.

Because of some small changes made in the Senate this week, including the controversial removal of an increase of the federal minimum wage to $15/hour, the bill must go back to the House for a vote before it can be made law. It is expected that the House will pass it quickly, and that President Biden will sign the bill by the end of the week, before PUA benefits are currently set to expire.