How the American Rescue Plan Can Help You
The stimulus law can provide assistance with rent, health insurance, child care, college tuition, and more
The $1.9 trillion COVID-19 relief package signed by President Joe Biden on March 11—called the American Rescue Plan Act, or ARP—is a complex piece of legislative machinery designed to get financial help into the hands of Americans suffering from the economic impact of the pandemic.
It will do this through a range of programs and channels that direct funds to workers, renters, homeowners, parents, college students, small-business owners, and others who need financial help.
In some cases, people won’t have to do anything to get help. In others, they’ll need to take steps to find out if they’re eligible, apply to the appropriate agency or organization, and follow up.
Economic Impact Payments
What is it? Direct payments of $1,400 per person ($2,800 for married couples), plus $1,400 for each dependent—including adult dependents. A family of four, for example, would get $5,600.
Who’s eligible? About 89 percent of households, depending on your income. You qualify for the full amount if you make up to $75,000 for singles (or married and filing taxes separately), up to $112,500 for heads of households, and up to $150,000 for married couples filing joint returns. The payments are reduced if you make above those amounts and eliminated altogether if you make more than $80,000 for singles, $120,000 for heads of households, and $160,000 for married joint filers.
How to get it: It should arrive automatically if you filed a 2019 or 2020 tax return, or if you registered for the first Economic Impact Payment in 2020 using the nonfiler’s portal. It will come either by direct deposit (if your bank info is on file with the IRS) or by check or debit card through the mail. Check the status of your payment using the Get My Payment tool at IRS.gov. For more info, go to IRS.gov/eip.
- U.S.-citizen children are eligible for a $1,400 dependent payment even if their parents are not.
- Unlike under the first and second relief payments, adult dependents now also qualify for $1,400 payments, as do college students who are claimed as dependents on their parents’ taxes (in which case the payment goes to the parents, not to the student).
- If you are eligible but missed your first and second payments, you can still get all three. You’ll need to file a 2020 return and claim the Recovery Rebate Credit.
What is it? All the emergency federal unemployment benefit programs that were originally passed in March 2020 and then extended in December 2020 until mid-March 2021 have now been extended through Sept. 6, 2021. The plan also increased the total number of weeks that unemployment benefits are available, from 50 to 79. The weekly federal supplement to state unemployment benefits—originally $600 and later reduced to $300—remains at $300 until Sept. 6.
Who’s eligible? Beyond extending unemployment benefits for traditional workers who lost their jobs, ARP extensions include the Pandemic Unemployment Assistance (PUA) program, which covers self-employed workers, gig workers, and others in nontraditional employment who ordinarily are not entitled to unemployment benefits, as well as the Pandemic Emergency Unemployment Compensation (PEUC) program, which covers workers who have exhausted their state benefits.
How to get it: Federal unemployment benefits are administered through state unemployment insurance programs. Contact yours by using this Department of Labor finder tool.
Worth noting: ARP prevents a big tax hit for people who got unemployment payments in 2020 by making the first $10,200 of benefits nontaxable for individuals with incomes below $150,000.
If this affects you and you have not filed your 2020 income tax returns, which are due May 17 this year, the IRS says it will "provide a worksheet for paper filers and work with the software industry to update current tax software so that taxpayers can determine how to report their unemployment benefits." If you already filed your 2020 return, the IRS asks that you not file an amended return until it issues additional guidance.
Child Tax Credits
What is it? Households with children can claim up to $3,000 in tax credits per child between the ages of 6 and 17, and $3,600 for kids under age 6—up from $2,000 per child.
Who’s eligible? The credit was extended for families with kids as old as 17, up from 16. The tax credit increase phases out for individuals making more than $75,000, heads of households making more than $112,500, and married couples making more than $150,000.
How to get it: Half the credit will be delivered by the IRS as periodic payments starting in July 2021 and lasting through the end of the year. The remaining half can be claimed on your 2021 income tax return.
Worth noting: ARP made these credits “fully refundable,” meaning you benefit from the credit even if you don’t earn enough income to pay taxes. So even the lowest-income households will get the extra funds, in the form of a check or direct deposit from the IRS.
Child Care Assistance
What is it? The Child and Dependent Care Tax Credit helps pay for the care of children 12 and younger while you (or, if you are married and file taxes jointly, you and your spouse) are working or actively looking for work. The credit has been expanded to cover up to 50 percent of care costs up to $4,000 in credits for one child and $8,000 in credits for two or more children.
Who is eligible? Working families who make less than $125,000 are eligible for the full 50 percent credit. The percentage gets reduced above that amount, but slowly. Even families with incomes as high as $440,000 a year can get a small child care credit.
How to get it: Claim it on your 2021 income tax return.
Worth noting: The tax credit is “fully refundable,” meaning you can get the full amount paid to you even if you don’t make enough money to owe taxes.
Earned Income Tax Credit for Workers With No Children
What is it? The EITC has long been structured to primarily benefit low-income working families with children. Low-paid workers without children, by contrast, have historically gotten relatively little. ARP changes that with the aim of benefiting more frontline workers—who disproportionately fall into this category—by increasing the maximum credit for low-paid workers without children to about $1,500, from about $540. It also raises the income cap for the credit from about $16,000 to about $21,000, and expands the age range for eligibility to both older and younger workers.
Who’s eligible? Workers ages 19 and older who are not full-time students and make less than $21,000.
How to get it: Claim the credit on your 2021 income tax return.
Worth noting: The amount of your earned income tax credit is generally calculated as a percentage of your income—but ARP was written to prevent the amount from decreasing if your income fell because of the pandemic.
What is it? Previous relief had increased Supplemental Nutrition Assistance Program (SNAP) benefits by 15 percent; ARP extends that through September. It also increases the value of Supplemental Assistance for Women, Infants, and Children (WIC) vouchers for fruit and vegetables to $35 per month for four months.
Who is eligible? Every state has its own eligibility requirements, usually based on income and resource limits. For eligibility guidelines in your state, contact its SNAP office through the Department of Agriculture's SNAP State Directory of Resources.
How to get it: Apply to your state’s SNAP office, which you can find using this Department of Agriculture page.
Worth noting: The law also extends the Pandemic-Electronic Benefit Transfer (P-EBT) program so that families with children who ordinarily get school meals can more easily purchase healthy food during the pandemic, including during the summer months.
What is it? Emergency aid to cover rent—including unpaid back rent—and in some cases associated costs like utilities. The December 2020 relief package included $25 billion in rental assistance. ARP adds another $21.6 billion for renters and small landlords, as well as $900 million in housing aid and assistance for tribal nations, Native Hawaiians, and people living in remote and rural areas. The money will largely flow through some 600 state and local rental assistance programs.
Who’s eligible? The basic eligibility criteria are that you’re facing a COVID-related financial hardship, you’re at risk of being evicted, and you have a household income at or below 80 percent of the median income in your area (which you can find by using this tool from the Department of Housing and Urban Development). It’s your current income that matters, not your income in previous years, so it can help people who recently lost their jobs, according to the National Low Income Housing Coalition (NLIHC).
How to get it: Contact emergency rental assistance programs in your state or municipality by using this NLIHC map and program finder tool or by calling 211, a national source for information about and referrals to local social services and other assistance.
- In addition to rent, some of these programs will help cover related expenses such as utility bills and even the cost of moving to other accommodations.
- If you already tried and failed to get rental assistance, it’s worth trying again.
- In September 2020, the Centers for Disease Control and Prevention issued a national moratorium on most evictions for nonpayment of rent to help prevent the spread of COVID-19. It has since been extended multiple times and is currently set to expire after June 30, 2021. To take advantage of it, you generally need to provide your landlord with a signed declaration of eligibility. A list of eligibility requirements and sample declarations are available on this NLIHC page, which is also a good place to check whether the eviction moratorium has been extended again.
What is it? Emergency aid of $9.9 billion for people struggling to pay mortgages, utilities, homeowners insurance, and other costs of home ownership due to COVID-19.
Who is eligible? The funds will be distributed through the states, which will develop their own criteria. But at least 60 percent of the money must go to households making less than the median income in their area or the median income nationally, whichever is greater, with the rest going to “socially disadvantaged individuals” as defined by the Small Business Act. In addition, recipients must owe less on their mortgage than the Federal Housing Finance Agency’s “conforming loan” limit for their county, which can be found here.
How to get it: Use this tool on the website of the National Council of State Housing Agencies to learn how the money is being distributed in your state and how to apply.
Heating and Cooling Assistance
What is it? The ARP added $4.5 billion to an existing program called the Low Income Home Energy Assistance Program (or LIHEAP), which helps low-income homeowners and renters pay heating and cooling costs.
Who is eligible? Use this tool to determine if you qualify based on your household income.
Grants for College Students
What is it? Congress added nearly $40 billion to the Higher Education Emergency Relief Fund established last year by the CARES Act. Colleges and universities must spend at least half that money on emergency financial grants to students, money that doesn't have to be paid back.
Who’s eligible? Colleges must give priority to students with exceptional financial need but can award grants to any student.
How to get it: Some schools are automatically distributing grants to students who already demonstrate financial need, such as those who qualify for income-based Pell Grants. Other schools require students to apply for the aid. Check with your college on how it's handling it.
Worth noting: It’s not yet clear if international students or undocumented students in the Deferred Action for Childhood Arrivals (DACA) program are eligible.
What is it? ARP will, for two years, eliminate insurance premiums on Affordable Care Act marketplace plans for many low-income households and lower them for most others. (These savings will come in the form of tax credits.) On average, premiums will decrease by about $85 per policy per month.
Who’s eligible? After taking into account the expanded tax credits, households earning up to 150 percent of the federal poverty level—that is, up to $19,000 for a single person and $39,000 for a family of four—will pay no premiums for a benchmark plan. And no one will have to put more than 8.5 percent of their income toward their health insurance premiums. (Previously, premium tax credits were not available to households with incomes greater than 400 percent of the federal poverty level.)
How to get it: Go to HealthCare.gov by Aug. 15.
- Lower-cost coverage starts April 1, and you can enroll during a special COVID-19 enrollment period through Aug. 15, 2021.
- Even if your premium is fully subsidized, you may need to pay deductibles, copays, and other out-of-pocket expenses.
- These changes to marketplace premium subsidies are temporary; the law puts them in effect during 2021 and 2022.