What the Relief Bill Could Mean for Your Bottom Line
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That’s how much the average tax filer will gain because of stimulus checks and federal tax code changes in the $1.9 trillion relief package approved this week, according to one analysis.
The major provisions of the massive relief bill, signed into law by President Joe Biden Thursday, amount to a 3.8% increase in 2021 after-tax income per filer, according to an analysis by the Urban-Brookings Tax Policy Center, an independent think tank. On average, that amounts to $3,060, the center said.
Broken out by income brackets, lower-income households stand to benefit far more, at least by share of their overall income. Those making $25,500 or less will see their after-tax income rise by over 20%, while middle-income households making between $51,000 and $91,100 will get a 5.5% boost.
The center included the impact of the stimulus checks plus changes in the Earned Income Tax Credit, the Child Tax Credit, and the Dependent Care Tax Credit. Each tax return is counted as one filer, so it could reflect an entire family or an individual, depending on how the taxes are filed.
|Estimated Impact by Income Bracket|
|Income||Change in After-Tax Income||Average Federal Tax Change|
(less than $25,500)
|Second Quintile ($25,000-$50,999)||9.3%||-$3,260|
|Middle Quintile ($51,000-$91,099)||5.5%||-$3,350|
|Fourth Quintile ($91,100-$164,299)||3.6%||-$3,770|
|Top Quintile ($164,300+)||0.7%||-$1,900|