Provisions of the American Rescue Plan that provided help to individuals included a third round of stimulus checks, expanded unemployment benefits and expanded Child Tax Credit benefits.
Provisions specifically to help small businesses included additional funding for the Paycheck Protection Program and grants for restaurants and bars.
Other provisions included state, local and school aid, and expanding health insurance coverage to more Americans under the Affordable Care Act.
The American Rescue Plan Act (ARP) of 2021 targeted $1.9 trillion in government aid to the U.S. economy.
Here’s a summary of some of the key provisions.
A third round of stimulus checks (also known as recovery rebate credits) were first delivered in March 2021. Payments of $1,400 per person were available to those with adjusted gross income of up to $75,000. Married couples with income up to $150,000 qualified for $2,800 payments. The threshold to qualify for the full $1,400 payment is $112,500 for those who file using head-of-household status. In addition, payments of $1,400 were provided for every dependent (child and adult) claimed on either the 2019 or 2020 tax return for households that meet the income thresholds. These payments were not subject to tax.
For those with incomes exceeding the thresholds outlined above, payments were smaller. Payments phased out to zero for individual taxpayers with incomes above $80,000, married couples with incomes above $160,000 and head-of-household filers with incomes above $120,000.
Expanded unemployment benefits
ARP extended enhanced unemployment benefits of $300 per week (on top of benefits received from state unemployment programs) through September 6, 2021. Also included in the bill was unemployment assistance for the self-employed, gig workers and others who don’t qualify for state-issued unemployment benefits.
Tax exemption on 2020 unemployment benefits
ARP addressed a concern about those collecting unemployment being subject to income tax on their benefits. It exempted the first $10,200 per person (the exemption amount applies to each spouse of a married couple) of unemployment benefits received in 2020 from federal income tax. This special provision applied to individuals or couples with 2020 adjusted gross incomes of less than $150,000. This same exemption was not applicable to unemployment benefits received in 2021.
Child tax credit
Families with children under the age of 18 received an expanded Child Tax Credit, resulting in direct monthly payments of up to $300 per qualified child from July through December 2021. Parents with children under age 6 received a credit totaling $3,600 per child, while those with children age 6-17 received a credit of $3,000 per child. Fifty percent of that total came through the monthly payments in 2021 with the second half of the payment occurring in April 2022. This is expanded from a previous credit of $2,000 per qualified child.
The credit applied for single parents with incomes of up to $75,000 per year and couples with incomes up to $150,000. The $2,000 child tax credit was still available for individuals earning $200,000 per year and couples with income up to $400,000 per year.
$21.6 billion in rental aid was available for states, territories and local governments to assist households dealing with financial hardship due to COVID-19, with other housing support programs included as well.
Additional funding for Paycheck Protection Program (PPP)
ARP authorized another $7.25 billion for this program that was first offered in 2020 under the CARES Act. It provided potentially forgivable loans for small businesses and other organizations that were negatively impacted by the COVID-19 pandemic. The program expired on May 31, 2021. Visit U.S. Bank Paycheck Protection Program for the most up-to-date information.
Grants for restaurants and bars
Nearly $29 billion was included in the package to fund a grant program for restaurants, bars and other food and beverage-related establishments. The grant was generally equal to an entity’s pandemic-related revenue loss. How the claimable loss was calculated varied depending on whether the establishment existed prior to 2019. The money could be used for specific purposes for a period spanning from Feb. 15, 2020 to Dec. 31, 2021.
Support for closed venues
Additional funds in this package were directed to the Shuttered Venue Operators Grant program that was established in a previous economic aid package. It was designed to support theaters, concert venues, museums and other cultural establishments hard hit by the pandemic.
Provisions were included to help facilitate vaccine distribution and implementation. Nearly $9 billion was directed to federal, state, local, territorial and tribal public-health agencies to aid in delivering vaccines to Americans. Another $20 billion was put toward federal biomedical research for vaccine and therapeutic development. $25 billion is dedicated to testing and contact tracing as well as reimbursement to hospitals that were financially impacted by the pandemic.
ARP expanded the number of Americans who qualify for subsidized health insurance coverage under the Affordable Care Act (ACA). Many who obtain insurance through the ACA with incomes exceeding the previously established thresholds for subsidized coverage may qualify for some financial support to offset the cost of health insurance premiums. These subsidies have now been expanded through 2025 with the signing of the Inflation Reduction Act.
Those who lost their job could utilize COBRA provisions of the law to maintain employer-sponsored healthcare coverage with 100% of the premium subsidized from April through September 2021.
State, local and school aid
$350 billion of the total package was directed to provide aid to state and local governments that suffered a decline in tax revenue due to the pandemic. There is another $10 billion to support infrastructure projects.
Funding for educational institutions included $122 billion for primary and secondary schools. This included funds targeted to address learning loss caused by the interruption of school through summer school, after school learning programs and extended school years. Another $40 billion was provided to institutions of higher education to, among other things, help limit COVID risks on campuses and provide financial aid to students.
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