Cliff Notes to the $1.9 Trillion Stimulus Plan

Yesterday, President Biden signed the American Rescue Plan Act - a $1.9 trillion stimulus plan to extend, renew and implement relief for those affected by the COVID-19 pandemic. 

Below is a breakdown of some of the key  components:

Unemployment Benefits

Eligible unemployed individuals may continue receiving an additional $300 in federal unemployment benefits through early September 2021.¹

Small Businesses & The PPP

The bill allocates around $50 billion toward assisting small businesses affected by COVID-19.1

The Paycheck Protection Program will receive $7.25 billion, but the new legislation does not change the PPP’s end date of March 31, 2021.1 Bars, restaurants and entertainment venues heavily impacted by the pandemic will also be eligible to receive grants from the government.

The government will be allocating $15 billion toward the Economic Injury Disaster Loan (EIDL) program for eligible businesses.

Employee Retention Credit

The Employee Retention Credit (ERC) will be extended through the end of 2021. With this refundable tax credit, business owners may claim up to $7,000 per employee per quarter.¹

Stimulus Checks

Similar to previous relief bills, eligible American taxpayers will be receiving direct stimulus payments of $1,400 as part of the new bill. Similar to previous checks, those with incomes up to $75,000 will receive $1,400 payments, while families with children will receive $1,400 per dependent. Married couples with an income of $150,000 or less will receive $2,800.¹

There will be a phase-out and income cap for individuals and couples who make more. Individuals earning between $75,000 and $80,000 will receive a lesser amount, with those making above $80,000 receiving no stimulus payment. The same applies for couples earning between $150,000 and $200,000 - with $200,000 being the cap.¹

Child Tax Credit

Previously, the child tax credit offered eligible families a $2,000 tax credit per child under the age of 17. With changes made under the new legislation, the child tax credit is temporarily expanding for 2021. Eligible families may receive up to $3,600 for children 5 and under and up to $3,000 for children ages six to 17.¹

Here is how the American Rescue Plan is changing conditions and stipulations regarding the child tax credit:¹

• The $2,500 earning floor will be waived.
• The credit will be fully refundable.
• The federal government will send eligible families credit in advance between July and December 2021.

COVID-19 Vaccination Distribution & Testing

Similar to previous legislation, a portion of the American Rescue Plan will designate funding for COVID relief. Around $15.05 billion will go toward vaccine production and distribution, while $50.8 billion will go towards testing, contact tracing, genome sequencing and global health response initiatives.¹

The Federal Emergency Management Agency will receive a portion of the funds as well.

State & Local Government Assistance

States, governments and cities will receive $350 billion in federal assistance.

In addition, this legislation includes a $10 billion infrastructure program to help local governments continue capital projects.¹

FEMA Emergency Food and Shelter Program

FEMA’s Emergency Food and Shelter Program will receive $510 million to support initiatives for homeless and struggling families including:¹

• Shelter and meals
• One month’s rent
• Mortgage assistance
• One month’s utility payments

There you have it, the new stimulus plan in a nutshell. 

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