The American Rescue Plan Act (ARPA) was passed by the Senate on Saturday, March 6 and in the House on Wednesday, March 10. The $1.9 trillion relief bill was signed into law on Thursday, March 11 by President Biden. Read on for details on the provisions included in the ARPA.
Individual Stimulus Checks
Estimated portion of the stimulus package: $422 billion
The ARPA includes another round of economic impact payments for people who meet certain income eligibility requirements. Single taxpayers who earn less than $75,000 will receive $1,400 and married taxpayers filing jointly who earn less than $150,000 will receive $2,800. The payments phase out at an adjusted gross income of $80,000 for single filers and $160,000 for joint filers. The bill also includes a $1,400 payment per dependent. Payment amounts will be determined using 2020 tax returns if already processed by the IRS or 2019 returns.
Federal Unemployment Assistance
Estimated portion of the stimulus package: $242 billion
The bill renews federal unemployment benefits at a lower level—$300 per month—through September 6, 2021. Additionally, it makes the first $10,200 of unemployment insurance benefits for households with incomes at or below $150,000 non-taxable.
Aid to Businesses
Estimated portion of the stimulus package: $47.25 billion
The ARPA includes funding for various industries hard hit by the pandemic, as well as a financial boost for the Paycheck Protection Program. The funds are broken down as follows:
Child Tax Credit
The ARPA makes a number of changes to the existing child tax credit, including:
The increased credit amounts faze out at certain income levels ($75,000 for singles, $150,000 for married couples filing jointly, and $112,500 for heads of household).
In order to distribute the monthly estimated child tax credit payments, the IRS will create an online portal where taxpayers can both opt out of advance payments and provide information that modifies the amount of their payments.
Additional Tax Credits
The ARPA includes a number of additional tax credits:
Aid to States and Cities
Estimated portion of the stimulus package: $350 billion
The bill allots $350 billion to assist state, local, tribal, and territory governments in responding to the coronavirus pandemic, broken down as follows:
Estimated portion of the stimulus package: $45 billion
The ARPA provides aid in the form of emergency rental assistance ($30 billion), funding for preventing COVID-19 outbreaks among the homeless ($5 billion), and mortgage assistance ($10 billion).
Aid to Schools
Estimated portion of the stimulus package: $170 billion
K-12 schools will receive $130 billion. The money is to be used to reduce class sizes, modify classrooms to enhance social distancing, install ventilation systems, purchase personal protective equipment, hire nurses and counselors, and provide summer school.
Of the $170 billion, the remaining $40 billion is earmarked for colleges and universities. The institutions are instructed to use the money to defray pandemic-related expenses and to provide emergency aid to students to cover expenses (e.g., food, housing, and computer equipment).
Funding for Testing and Vaccinations
Estimated portion of the stimulus package: $60 billion
Of the $60 billion allocated in this area, $14 billion is designated for expansion of COVID-19 testing (including enhanced contact tracing, laboratory expansions, and the creation of mobile testing units), and $46 billion is set aside for vaccination distribution and administration.