The House of Representatives recently passed the American Rescue Plan aimed at helping American individuals, families, and businesses recover financially from the coronavirus pandemic. The Senate made some changes and passed the amended measure on Saturday, March 6. The bill now returns to the House for final passage as early as Tuesday, March 9, and an expected signature by President Biden. The broad-based legislation will include assistance for individuals and businesses, as well as state and local governments in an attempt to mitigate some of the financial damage.
Here are some of the things we can expect once the legislation is passed.
HELP FOR INDIVIDUALS
There are a number of initiatives included in the House of Representatives package aimed at assisting individuals and families including:
- Individual stimulus payments
- Enhanced child tax credit
- Housing and food assistance
- Unemployment assistance
Individual stimulus payments
The American Rescue Plan would provide $1,400 stimulus payments for individuals and their dependents who meet certain income requirements. The current plan maintains that payments will be provided in full for individuals earning $75,000 or less and married couples making less than $150,000.
Enhanced Child Tax Credit
The enhanced child tax credit would increase the current child tax credit from $2,000 per child to $3,000 for children ages 6 to 17 and $3,600 for children under 6. Seventeen-year-old children would be eligible for the credit for the first time.
The tax credit would be increased for one year and would be fully refundable with no minimum income restrictions.
Beginning in July, eligible families would receive the credit as an advance payment of $250 per month per child ($300 for children under 6) for the remainder of 2021.
Unemployment Income for 2020
The Senate added a provision that would exempt from income tax the first $10,200 of unemployment compensation. This rule would apply to 2020 only and applies to individuals with adjusted gross income under $150,000. Those who might get relief under this rule should delay filing for 2020 to see if the bill passes, and then for the IRS to reprogram its systems for 2020.
Housing and Food Assistance
The bill includes numerous provisions designed to provide housing (including rent and mortgages) and food assistance for families impacted by the pandemic. These provisions include:
- $30 billion in rental assistance
- $10 billion for mortgage assistance
- $5 billion to help prevent the spread of COVID-19 in homeless populations
- $5.8 billion in EBT and WIC assistance to support nutritional programs for school-aged children and low-income women and infants
The federal enhanced unemployment program would be extended through August 29, 2021, with the weekly benefit at $300.
HELP FOR BUSINESSES
In an effort to help hard-hit businesses, the American Rescue Plan outlines numerous elements slated to help businesses recover.
The legislation includes $25 billion to help restaurants and bars. In addition, $22 billion in relief has been earmarked with $15 billion set aside for Economic Injury Disaster Loan Advance grants and $7 billion in additional funding for the Payroll Protection Program.
The legislation also provides $12 billion of funding for the airline industry to help curb the need for layoffs.
HELP FOR STATE AND LOCAL GOVERNMENTS
The American Rescue Plan includes $350 billion to assist state and local governments as well as tribes and territories.
This includes funds for the FEMA Disaster Relief fund, infrastructure needs, and transportation assistance.
Also, $130 billion would go towards helping K-12 schools provide personal protective equipment (PPE), implement social distancing, improve ventilation systems and reduce class sizes.
Higher educational institutions would receive $40 billion with a significant portion specifically for helping to reduce hunger and homelessness and alleviate other challenges which might be experienced by students related to the pandemic.
Childcare providers will also get a boost through the Child Care and Development Block program ($40 billion). An additional $1 billion would be used to support Head Start programs.
The American Rescue Plan includes funding of $20 billion to establish a national vaccine program with an additional $50 billion to support coronavirus testing.
The bill also includes money for the Affordable Care Act (ACA), the Consolidated Omnibus Budget Reconciliation Act (COBRA) and paid leave.
Overall, the American Rescue Plan includes $1.9 trillion created to help individuals, families and businesses recover from the negative impact of the coronavirus pandemic.