By: Laurie A. McCarthy, Esquire
The American Rescue Plan Act of 2021 (the “Plan”) is a $1.9 trillion stimulus package, following the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), and the $900 billion stimulus included in the Consolidated Appropriations Act of 2021.
Direct Financial Payments
- Individuals with an adjusted gross income (AGI) of $75,000 or less and couples with AGIs of $150,000 or less will receive a direct payment of $1,400 per person. Each of their qualified dependents will also receive a $1,400 payment regardless of age.
- Households with an AGI of more than $80,000 for single filers, $120,000 for Head of Household filers, and $160,000 for married filing jointly will not receive any payments.
- About 89% of filers will receive a direct stimulus payment.
Extended Unemployment Benefits
- Pandemic Unemployment Assistance (PUA) of $300 a week is extended through September 6, 2021.
- The total number of weeks available is increased from 50 to 79.
- The first $10,200 of unemployment benefits
collected in 2020 is tax free for families making $150,000 or less.
- People who had taxes withheld from unemployment benefits in 2020 will be able to recover those taxes when they file their 2020 taxes or via an amended tax return if they have already filed taxes for 2020.
Expanded Child Tax Credit
- For 2020, the child tax credit is an income tax credit of up to $2000 per eligible child (under age 17) which may be partially refundable.
- For 2021, the credit is $3,000 (children under age 18) or $3,600 (children under 6) per eligible child for American taxpayers for 2021; it is fully refundable and can be received as advance payments.
- Eligible children are legal dependents who are U.S. citizens, U.S nationals, or U.S. resident aliens.
- This tax credit is intended to help low- to middle-income taxpayers and thus is phased out for high-income families.
- The increased, fully refundable $3000/$3600 annual credits currently are provided only for 2021. Unless extended by future legislation, the child tax credit will revert to its 2020 amounts and rules in 2022.
Schools and Childcare Block Grants
- The bill sets aside $130 billion for K-12 education.
- This money will be used to reduce class sizes, improve ventilation, purchase personal protective equipment, and fund other steps to help schools reopen safely.
- About $40 billion will go to colleges and universities to provide emergency financial aid grants for students.
- An additional $40 billion will go to childcare providers through the Child Care and Development Block Grant program.
- $1 billion is allocated for the Head Start program.
Help for Businesses
- A new program for restaurants and bars allocates $25 billion in pandemic assistance grants.
- Grants can provide up to $10 million per company with a limit of $5 million per physical location.
- Grants must be used to cover payroll, rent, utilities and other expenses.
- The Paycheck Protection Program will receive an additional $7.25 billion.
- $50 billion is allocated to pay for additional COVID-19 testing.
- $19 billion to increase the size of the public health workforce..
- $16 billion will fund vaccine distribution and supply chains.
The Law Firm of DiOrio & Sereni, LLP is a full-service law firm in Media, Delaware County, Pennsylvania. We strive to help people, businesses and institutions throughout Southeastern Pennsylvania solve legal problems – and even prevent legal problems before they occur. To learn more about the full range of our specific practice areas, please visit www.dioriosereni.com or contact Laurie A. McCarthy, Esquire at 610-565-5700 or at [email protected]
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