Here is a summary of the highlights of the "American Rescue Plan" that is expected to be signed by President Biden tomorrow afternoon.

AID TO UNEMPLOYED

• Expanded unemployment benefits from the federal government of $300/week will be extended through Sept. 6, which is in addition to what people are receiving through their state unemployment program
• The first $10,200 of unemployment benefits accrued in 2020 will be non-taxable for households earning under $150,000.
• A 100% subsidy of COBRA health insurance premiums through the end of September, to ensure laid-off workers can remain on their employer health plans at no cost.

CHECKS FOR MOST TAXPAYERS

• Direct payments of $1,400 for a single taxpayer earning up to $75,000, or $2,800 for a married couple that files jointly earning up to $150,000, plus $1,400 per dependent.
• The size of the check will be smaller for those making slightly more, with a hard cut-off at $80,000 for individuals and $160,000 for married couples.
• Payments will start going out this month.

AID TO BUSINESSES

• $28.6 billion for a new grant program for restaurants and bars hurt by the pandemic. The grants can be used to cover payroll, rent, utilities and other operational expenses.
• $7.25 billion for the Paycheck Protection Program, which will now allow more nonprofits to apply for loans that are designed to help borrowers meet their payroll and operating costs and can potentially be forgiven.

AID TO SCHOOLS

• $130 billion to schools for students in kindergarten through 12th grade. The money can be used to reduce class sizes and modify classrooms to enhance social distancing, install ventilation systems and purchase personal protective equipment. The money could also be used to hire more nurses, counselors and janitors, and to provide summer school.
• $40 billion for colleges and universities to defray pandemic-related expenses and to provide emergency aid to students to cover expenses such as food and housing and computer equipment.
• $39 billion for child care to help providers pay for staffing, rent and supplies, and through a block grant program that subsidizes the cost of child care for low-income families.

HEALTH CARE

• Increasing coverage and financial assistance under the Affordable Care Act through the end of 2022, so that a greater number of middle-class households will qualify. 
• More money for states that have not yet taken up the Medicaid expansion that is available under the ACA to cover more low-income adults. 
• $3 billion for states to help address mental health and substance use disorders, which have been exacerbated by the pandemic.
• $14 billion for increased support for the Department of Veterans Affairs.

BIGGER TAX BREAKS FOR HOUSEHOLDS WITH AND WITHOUT KIDS

• Increase the tax break to $3,000 for every child age 6 to 17 and $3,600 for every child under the age of 6. The current law provides for a $2,000 tax break. Families will get the full credit regardless of how little they make in a year.
• Expand the Earned Income Tax Credit for 2021 by making it available to people without children. The credit for low and moderate-income adults would be worth $543 to $1,502, depending on income and filing status.

RENTAL AND HOMEOWNER ASSISTANCE

• $30 billion to help low-income households pay their rent and to assist the homeless.
• States and tribes would receive an additional $10 billion for homeowners who are struggling with mortgage payments and other housing costs because of the pandemic.

MONEY FOR STATE AND LOCAL GOVERNMENTS

• $350 billion will be sent to state and local governments and tribal governments for costs incurred up until the end of 2024. Small states will get at least the amount they received under virus legislation that Congress passed last March.

TESTING AND VACCINES

• $50 billion to expand testing for COVID-19 and to enhance contract tracing capabilities with new investments to expand laboratory capacity and set up mobile testing units. It also contains more than $15 billion to speed up the distribution and administration of COVID-19 vaccines across the country. Another $1 billion would go to boost vaccine confidence. And $10 billion would be used to boost the supply of medical devices and equipment to combat the virus under the Defense Production Act.

There are many, many more details and programs that will receive funding under this new Act, as well as changes that affect the income and tax obligations of individuals and businesses.  We will be exploring all of these in depth to ensure our clients are receiving all the benefits to which they are entitled under the law.

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