American Rescue Plan Act of 2021 – What’s Included?

One year into the global pandemic, President Biden has signed into action a new $1.9 trillion stimulus package known as the American Rescue Plan Act. It’s designed to help the American people continue to recover from the devasting economic impact of COVID-19.

With many of the conditions of the last two stimulus packages set to expire, this major piece of legislation extends some crucial benefits while implementing new ones. Here are the highlights:

Stimulus Checks - Anyone making up to $75,000 ($150,000 for couples) will receive the full $1,400 direct stimulus payment. You can receive an additional $1,400 for each dependent. Payments decrease as income increases, phasing out entirely at $80,000 ($160,000 for couples).

Extended Unemployment Benefits - The new bill extends both the Pandemic Unemployment Assistance (PUA) program for gig workers and the Pandemic Emergency Unemployment Compensation (PEUC) program for long-term unemployed. This extends the $300 per week of supplemental unemployment benefits through September 6, 2021 and increases the maximum duration of jobless benefits under each program to 79 weeks and 53 weeks, respectively. The Federal Pandemic Unemployment Compensation (FPUC) program’s jobless benefits are also extended through September 6, 2021. Households that made $150,000 or less in 2020 can waive taxes on the first $10,200 in unemployment insurance benefits. Any taxes already withheld will be recoverable up to this amount.

Child Tax Credit Expansion - The new plan temporarily expands the Child Tax Credit in 2021 from $2,000 to $3,000 for every child aged six to seventeen and $3,600 for every child under six. This credit increase is for single tax returns making up to $75,000, heads of households up to $112,500, and joint returns up to $150,000. The expanded credit is fully refundable and will be paid in advance of the 2021 tax season in monthly installments made during the second half of 2021.

Small Business Assistance - An additional $15 billion has been allocated to fund Emergency Injury Disaster Loans (EIDL). $7.25 billion has been allocated to the Paycheck Protection Program (PPP) to support small businesses, including eligible online news organizations and non-profits. The deadline to apply for a PPP loan is still March 31, 2021. Another $25 billion is available as part of a new measure to finance the Restaurant Revitalization Fund that provides debt-free grants for struggling food service and drinking establishments. Grants are maxed out at $10 million per company and $5 million per physical location. Venues in the entertainment industry will soon be able to apply for additional federal aid from the $1.25 billion being added to the Small Business Administration’s Shuttered Venue Operators Grant (SVOG) program.

Healthcare Assistance - Over $30 billion will subsidize Affordable Care Act (ACA) premiums, which will temporarily lower healthcare costs through the ACA marketplace. The bill also subsidizes all COBRA health insurance premiums, giving unemployed workers the ability to stay on employer healthcare plans through September 30, 2021.

Housing Assistance - While the moratoriums on evictions and foreclosures will still end March 31, 2021, over $45 billion in new aid is available for those behind on rent, mortgages, and utilities, as well as those at risk of becoming homeless and those that are already homeless.

Education Relief and Assistance - The bill earmarks $125 billion in funding K-12 schools to help pay for pandemic-related reopening costs and $39 billion in grants for higher education institutions. It provides another $39 billion for childcare providers through programs such as the Child Care and Development Block Grant (CCDBG). An additional $1 billion in funds is earmarked for the Head Start Program. One provision in the bill addresses the student debt crisis. It allows any student loan forgiveness passed from December 31, 2020, through 2025 to be considered nontaxable income.

Public Health - Over $55 billion will fund more COVID-19 testing, contact tracing, PPEs, and vaccination programs for distribution and supply chains.

Food and Nutrition Aid - Some of the $12 billion in nutritional aid will allow for increased benefits provided under the Supplemental Nutrition Assistance Program (SNAP) to be extended through September 30, 2021, and increased funding for the USDA and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

As always, we’ll continue to monitor the impacts of this newest COVID-19 relief legislation and share additional information as it becomes available. If we can answer any questions for you, please don’t hesitate to reach out.