American Rescue Plan

American Rescue Plan of 2021

President Biden signed the American Rescue Plan of 2021 (ARP) into law on Thursday, March 11, 2021. ARP provides approximately $1.9 trillion in spending to address the healthcare and economic impact of the COVID-19 pandemic, including direct aid to individuals and families in the form of stimulus checks and child tax credits, and assistance to small businesses.

STIMULUS CHECKS

Who is eligible for a stimulus check and how much will they be? 

Under the bill, single filers with incomes up to $75,000, head of household filers with incomes up to $112,500, and joint filers with incomes up to $150,000 will receive payments of $1,400.  Those making more than that income threshold will receive lesser amounts, and those single filers making more than $80,000 (head of household filers making $120,000, and joint filers making $160,000) will not receive  stimulus payment at all.

You can use this calculator to see how much you will likely receive, here.

When will I get my stimulus check?

The IRS began issuing stimulus payments as of March 13, 2021. If you have direct deposit set up with the IRS, you will get the check soon. If you receive your tax refunds via check or prepaid debit card, those should arrive in the mail over the next few weeks.

Are adult dependents eligible for stimulus checks?

Unlike previous payments, adult dependents (those who are 19-24, retirees, or adults with disabilities who rely on another person for more than half of their expenses) are now eligible for payments, as long as the person who claims them as a dependent meets the eligibility requirements. 

The check will be sent directly to the person who claims the dependent, not to the dependent.

Previously, only dependents under 17 were eligible.

Are mixed status or undocumented families eligible for a stimulus check?

In cases of mixed status families where only one spouse has a Social Security number, the family will get a payment of $1,400 for the spouse with a number, plus $1,400 for each dependent who also has a Social Security number.

If both parents are undocumented but their children are U.S. citizens, then each child qualifies for a check, as long as their parents have filed tax returns with individual tax identification numbers (ITINs).

What tax return year is the government using to determine eligibility for a stimulus check?

Under the bill, the payment is initially based on your 2019 tax returns or your 2020 returns if you have already filed.

What if I never received my first or second stimulus check?

If you were eligible to receive the first or second stimulus check and didn’t receive it, you must claim the Recovery Rebate Credit when you file your 2020 taxes.

Are stimulus checks tax free?

Yes, stimulus checks are not considered taxable income. They will not be taxed. Your eligibility for any federal government assistance or benefit program will not be affected when you get a stimulus check.

CHILD TAX CREDITS

What is the child tax credit?

If you earn less than $75,000 or your household earns less than $150,000, your family will receive $3,600 for each child under age 6 and $3,000 for each child aged 7-17.  If your income exceeds that threshold, the credit will be reduced by $50 for every additional $1,000 of income. Individuals earning $95,000 or joint filers earning $170,000 are not eligible for the tax credit.

The tax credit applies to your 2021 tax year. However, the IRS will advance some of the credit in the forms of checks that will be delivered or direct deposited. Those advances will begin to arrive as early as July. These checks will continue to arrive periodically through December. The remaining amount will be credited against your taxes when you file next year.

You do not have to be employed to qualify for the child tax credit.

UNEMPLOYMENT INSURANCE

Will unemployment assistance be extended?

The current $300 per week federal benefit will be extended through September. The first $10,200 of unemployment benefits received in 2020 will not be taxable for households making less than $150,000.

SMALL BUSINESSES

What assistance is available for small businesses?

The ARP provides $15 billion for Economic Injury Disaster Loans (EIDL) grants, expands Paycheck Protection Program (PPP) eligibility, and adds $7.25 billion in funding and additional resources to help small and disadvantaged businesses. More information is available here.

The law also increases the funding allocation for a new program at the SBA to offer aid to restaurants, bars and other venues hardest hit by the pandemic. Under the bill, $5 billion is set aside specifically for smaller establishments with less than $500,000 in 2019 annual revenue. During the first 21 days, applications from restaurants owned and operated by women, veterans, or socially and economically-disadvantaged individuals will receive priority.