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What’s in the New Coronavirus Relief Package?

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What we’ll cover:

In December 2020, Congress passed its second coronavirus relief package to provide additional assistance to individuals and small businesses that have been impacted by Covid-19. 

The new law, formally known as the Consolidated Appropriations Act of 2021 (P.L. 116-260), includes a number of familiar measures that were in the CARES Act, the first economic stimulus plan that was signed into law in March 2020. 

In this article, we’ll highlight five key items in the new relief package and how they could help those who are looking for additional financial resources. 

1. $600 economic impact payment for eligible taxpayers (“stimulus payment”)

As with the CARES Act, many taxpayers may see a direct deposit from the government in their bank account. The IRS began sending out its second round of economic impact payments on December 29, 2020. 

How it works: Each eligible taxpayer may receive up to $600 ($1,200 for married couples filing jointly), plus an additional $600 for each qualifying child under age 17. If you qualified for the first round of payments in early 2020, the second payment will be sent to you automatically either via direct deposit or a paper check.

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Generally, to receive a payment, you have to meet these eligibility rules:

  • You’re a U.S. citizen or resident alien.
  • No one claimed you as a dependent on their 2019 tax return.
  • You have a social security number (SSN) valid for employment.
  • Note: Previously under the CARES Act, married couples, filing a joint return, where only one spouse had a valid SSN were generally not eligible to receive a payment. But the new law updated this rule: As long as one spouse has a valid SSN, that spouse will be eligible to get a direct payment of up to $600 (plus $600 for each qualifying child claimed on their 2019 tax return). 

You’re eligible to receive the full $600, as long as your adjusted gross income (AGI) for 2019 does not exceed:

  • $150,000 if filing a joint return (or if filing as a qualifying widow or widower)
  • $112,500 if filing as head of household
  • $75,000 for eligible individuals using any other filing status

If your AGI goes over those amounts, the IRS will trim your payment by 5% of the amount over the limit.

For more information: The IRS has a FAQ page that provides additional details on eligibility rules, payment requests and payment status.

2. Extension of unemployment benefits 

The CARES Act provided additional unemployment assistance to people who lost their jobs at the height of the pandemic through three key programs: the Federal Pandemic Unemployment Compensation Program (FPUC); Pandemic Emergency Unemployment Compensation Program (PEUC); and Pandemic Unemployment Assistance Program (PUA).

The new coronavirus relief package extends certain benefits, originally authorized under the CARES Act, for another 11 weeks (until March 14, 2021). 

Here are some of the highlights: 

Pandemic Unemployment Assistance. The PUA program was first put into place to provide unemployment benefits to individuals who were traditionally not eligible for them prior to the pandemic, like independent contractors and gig workers. Generally, the new law extends PUA program benefits for 11 weeks until March 14, 2021. Workers who are eligible and have not used up all their unemployment benefits by that time can continue receiving them through April 5, 2021. 

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Federal Pandemic Unemployment Compensation. The FPUC program has also been extended to provide additional unemployment benefits. Eligible individuals may receive an extra $300 per week (for weeks of unemployment beginning after December 26, 2020 to March 14, 2021). 

Pandemic Emergency Unemployment Compensation. Before the pandemic, many states typically provided unemployment insurance benefits for up to 26 weeks. Under the CARES Act, the PEUC program allowed states to extend the duration of unemployment insurance benefits for up to an additional 13 weeks. 

The new relief package extends this program to provide benefits for another 11 weeks until March 14, 2021. Altogether, eligible individuals could receive up to 50 weeks of benefits maximum. 

Remember: Unemployment benefit rules can vary based on your personal situation and the rules in your state. Visit the Department of Labor and your state’s unemployment agency for more details on how the new law may impact you.

3. Flexible Savings Accounts (FSAs)

Generally speaking, FSAs have a use-or-lose rule: If you don’t spend the money in your account by the end of the plan year, you’ll have to forfeit it. (Depending on the type of FSA plan you have, some employers may allow you to carry over a limited amount to the next year or offer you a short grace period to spend any unused funds.) 

The new law gives people a little more flexibility when it comes to using their health care or dependent care FSA funds. Employers may allow one of the following options:

  • Unlimited carryover. Unused FSA balances from the 2020 (and 2021) plan year can be carried over into the following year. In other words, money that’s left over at the end of 2020 can be used for qualified expenses in 2021. And any funds still remaining at the end of 2021 can roll over to 2022. 

 Check with your FSA plan administrator to see what options are available to you.

  • 12-month grace period. Some employers give their employees a grace period (usually an extra 2 ½ months) to spend any money that’s left over in their FSA. The new law basically allows employers to extend this grace period to 12 months. So again, leftover funds from the 2020 and 2021 plan years can be used for qualified expenses in 2021 and 2022, respectively. 

Whether your employer applies the unlimited carryover or extended grace period option, the idea is the same: You get some extra time to use your FSA funds. 

Keep in mind that the law leaves it up to the employer to decide whether or not they want to provide one of these options. It’s not mandatory, so they may choose not to. Check with your FSA plan administrator to see what options are available to you.

4. Charitable contribution deduction for non-itemizers

Typically, you can only deduct charitable contributions if you itemize deductions on your tax return.


Consult the IRS or a professional tax advisor if you have any questions about your eligibility to claim the deduction.


The CARES Act allows taxpayers to deduct up to $300 of cash donations made to qualified charitable causes in 2020 – even if they don’t itemize. In other words, taxpayers who choose to take the standard deduction could claim the charitable contribution deduction when they file their 2020 tax return (see IRS Tax Tip 2020-170 for more information).

The new law extends the $300 charitable contribution deduction through the 2021 tax year. And married couples filing jointly could also deduct up to $600 for their qualified donations.

Consult the IRS or a professional tax advisor if you have any questions about your eligibility to claim the deduction.

5. Extension of small business relief programs

The new law also provides additional funding for the Paycheck Protection Program and the Economic Injury Disaster Loan program. These programs were first included under the CARES Act to provide some financial relief for small business owners impacted by Covid-19. 

Visit the Small Business Administration’s website for more information on these programs, their eligibility rules and how to apply. 

This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.  Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.