President Biden signed the $1.9 trillion American Rescue Plan into law. What is inside the bill?
The American Rescue Plan will authorize a third round of direct payments, this time in the amount of $1,400. Individuals earning less than $75,000 per year will receive the full $1,400 payment, as will heads of household earning less than $112,500 per year and couples filing jointly earning less than $150,000. Eligible families will also receive $1,400 payments for dependents—both children and adults. The payments will phase out as income rises.
$300 per week unemployment benefits
The law will extend the existing enhanced federal unemployment supplement of $300 per week through September 6. It will exempt the first $10,200 in unemployment benefits received in 2020 from tax for families earning less than $150,000 per year. The package also extends the Pandemic Unemployment Assistance program which helps freelancers, gig workers and contract workers who have lost income during the pandemic.
Child tax credit
The package also includes a major expansion of the Child Tax Credit. The new credit for 2021 will give eligible parents $3,000 for every child aged 6 to 17 and $3,600 for every child under age 6 (up from $2,000 per dependent child up to age 16). Half of that money is slated to be sent out in advance in a series of payments between July and December, and families will be able to claim the remainder on their tax returns next year.
The law will extend extra support for small businesses, including another $7.25 billion in funding for the popular Paycheck Protection Program, which provides forgivable loans to help small businesses cover overhead and payroll costs. The legislation does not extend the duration of the PPP, which is slated to expire on March 31. The new law also includes more than $20 billion in grants for bars and restaurants that have lost revenue and $15 billion for the Economic Injury Disaster Loan program, which existed before the pandemic and is designed to help small businesses and nonprofits weather disasters.
The package includes $50 billion in disaster relief funding that will be used to reimburse state and local governments for protective equipment, vaccine distribution, healthcare overtime and other costs related to combating Covid-19. There is $48 billion for testing and contract tracing, $10 billion for manufacturing medical supplies, $8.5 billion for rural providers, and another $7.7 billion to bolster the public health workforce. The Centers for Disease Control and Prevention will also receive $7.5 billion for vaccination efforts.