As many of you have followed over the last few weeks, President Trump signed a second relief bill on December 27th in response to the COVID-19 pandemic which includes, among other things, an additional $600 in stimulus money to those who are eligible. Additionally, the bill includes an extension on time allotted to pay back the previously deferred payroll taxes from the last few months of 2020. The bill also includes a number of other entitlements and benefits to include a 1% increase in salary for GS employees in 2021. For those of you who are not aware, military pay will increase by 3.0% in 2021 across the board. We’ll take a look at the finer details of the stimulus checks and deferral payments below:
Stimulus checks are expected to be paid out at the latest by early January and include active duty service members and their families. Based on the limits, if you earned less than $6,250 per month in base pay 2019, you are eligible for the full $600. That applies to nearly all E-8s and below and most O-3s and below. Check your taxable income from 2019 for eligibility. The full details are below:
- Military members, veterans, and civilians earning under $75,000 in base pay will receive the full $600 with the benefit reduced by $5 per $100 of income over the limit
- The limit is $150,000 for married couples filing jointly (2019 taxes)
- A $112,500 limit applies when filing as head of household
- $600 is also offered per qualifying child
As for paying back the deferred payroll taxes, the previous plan was to collect the deferrals in full between January and March of 2021. Under the new bill, federal employees have the entire year to pay that money back. The 6.2% in base pay previously deferred between September and December of 2020 will now be collected over a 12 month period. The bill also includes provisions for upgraded child care facilities and on-post schools.
What should you do with this round of stimulus? Take a look at our next post for the top money moves to make in 2021. $
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