The world is a changed place after COVID-19 and it’ll most likely be at least 6 months to a year before a vaccine is released. Even though the economy has improved since its low in March, there’s still a long road ahead. Lawmakers are searching for ways to address the many issues caused by the lockdowns and paying Americans up to $4,000 to travel domestically may be a solution.
In June, Senator Martha McSally introduced the American Tax Rebate and Incentive Program (TRIP) Act . If passed, a tax credit of up to $4,000 per adult would be available to take a vacation within the US and to a place that’s over 50 miles from your home. If your spouse joins, that’s up to $8,000 and each qualifying child would get you up to an additional $500.
As written, the eligible expenses are fairly universal and would include lodging, food, drinks, transportation, entertainment and other expenses related to attending a business meeting/conference.
The credit can even be taken if you’re visiting your own vacation home, but lodging would not be one of the eligible expenses for the credit. There’s no income limitation in the current form. The credit would be retroactive starting 1/1/2020 and end 12/31/2022, so expenses would need to be within this window.
Why A Travel Stimulus Package
After COVID-19 hit, the US unemployment rate shot up to almost 15%. That was the highest and quickest it had ever gotten to those levels. While it has subsided from its highs the percentage is still over 10%. In order to assist struggling Americans the government stepped in to provide support through stimulus packages.
The goal of a stimulus package is to get money into a struggling economy. The first stimulus package from the pandemic was a direct payment to individuals. This is the quickest way to get money flowing into the economy.
The Tax Rebate and Incentive Program (TRIP) targets the worst hit areas of the economy, travel and leisure. Unemployment rates in this industry skyrocketed to over 50%. There’s just about 17,000,000 jobs in the travel and leisure industry so over 8.5 million people lost their jobs.
The path to getting back to ‘normal’ will take some time. Airlines are still down 70%+ from their 2019 numbers. We really wont be back to even until a vaccine is introduced and even then, it will take some time.
This is why the next stimulus package could include a $4,000 rebate for your next TRIP. You don’t want to exclude higher income earners because where the money goes is what’s most important.
If you decide to travel, be safe, have fun and know you’re helping those hit hardest by the current pandemic.