The American Rescue Plan has the potential to help lift millions of Americans, including Philadelphians, out of poverty. This could be life-changing, not only for Philadelphia families, but for our city as a whole.
In addition to the much-needed funding for local governments, vaccine distribution, business relief, and school reopening, the American Rescue Plan also provides substantial direct aid to individuals and families.
In fact, the majority of the $1.9 trillion dollars from this stimulus package will go towards direct aid for individuals, benefits that will build a bridge to economic recovery for working families. This includes stimulus checks, extending unemployment benefits and eligibility, increasing SNAP benefits, and more.
Below we’ve outlined a few of the ways the American Rescue Plan will help Philadelphia families, and how you can make sure you receive your stimulus check and other relief, including free tax preparation.
The most important action Philadelphians can take to help themselves, their families, and their city is to file your 2020 taxes no later than May 17, 2021—even if you did not earn income or have never filed in the past.
The stimulus checks that the American Rescue Plan provides will benefit more than one million Philadelphians. These payments—up to $1,400 per person plus an additional $1,400 per child—will help our residents pay bills, pay off debt, buy necessary goods, and ultimately stimulate Philadelphia’s commercial corridors and broader economy.
Child Tax Credit Increase
The American Rescue Plan also provides crucial relief benefits through changes to the Child Tax Credit.
For example, a single parent with two young kids could get $7,800 this year thanks to the stimulus and expanded Child Tax Credit. These changes to the child benefit are potentially transformational—especially if Congress succeeds in making the change permanent.
For the first time, the funds are available even if a parent or legal guardian doesn’t work, or didn’t make much money last year. Now, we estimate that more than 90 percent of Philadelphia’s children—about 300,000—will benefit from at least $3,000 per child this year. That’s a reliable foundation that guarantees almost all Philly families have income to support their basic needs.
And importantly, families will not have to wait until next year for the tax credit to take effect—regular payments are due to start in July. The remaining 6 month of payments will be made by the government as part of 2021 tax returns.
Additional funding for rental assistance could help thousands of Philadelphians cover their biggest household expense and maintain stable housing.
Our city’s rental assistance program, PHL Rent Assist, has already provided more than $64 million in support to more than 14,000 households, and we plan on reopening the program to tenants by the end of this month. This phase of funding will also help cover utility costs. Pre-registration is already available for landlords.
Earned Income Tax Credit
The American Rescue Plan also makes changes to the Earned Income Tax Credit so that individuals without children are eligible for more money back than ever before.
Help is here
The combination of these benefits has the potential to be a game-changer for Philadelphia families. If Congress makes the child benefit permanent, which Congressional leadership has said they plan to do, this is potentially the biggest change in anti-poverty efforts in a generation.
Taken together, experts say the benefits in this new relief package will reduce poverty nationally by more than half for children—as well as for people in households experiencing job loss.
And it will reduce the disparities in poverty rates for Black and Hispanic people relative to white, non-Hispanic people.
These measures will be even more important in Philadelphia, where the poverty rate is higher, and where more people will be eligible for and benefit from the assistance.
Make sure you receive your benefits
For the full promise of these benefits to be felt, Philadelphians will need to take action: Make sure to file your taxes—even if you don’t usually file or didn’t work this year.
There may be more instructions coming from the federal government about how to claim these benefits without a full tax filing. In the meantime, the primary way to guarantee you’ll receive benefits is to file your 2020 taxes.
Filing a tax return means the federal government will have the information they need to make both the stimulus and the child benefit payments to you.
Please know, filing taxes shouldn’t cost you money—there are trusted organizations who can help for free. You can schedule an in-person or virtual appointment with the Campaign for Working Families. The Free Library also provides resources and guidance for filing taxes, including hard copies of IRS forms at their central branch.
The American Rescue Plan has the potential to truly help lift our residents out of poverty and create financial changes that could affect families in our city for generations.
Please make sure to file your taxes, even if you didn’t have earnings this year, don’t owe anything or don’t usually file, so that you can be among the many Philadelphians receiving these important benefits.