COVID Relief Update: The American Rescue Plan Act of 2021
























Part 1: Episode 117 - On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”), fulfilling one of his campaign pledges to provide additional COVID-19 pandemic relief. Because ARPA was just enacted and there are numerous provisions, we will need to wait for future guidance issued by the IRS and Department of Treasury. In the meantime, this Part 1 Podcast summarizes the provisions related to (1) Stimulus Payments, (2) Child Tax Credit and (3) Child and Dependent Care Tax Credit. (For a summary of additional provisions, be sure to see the full transcript below and listen to the Part 2 Podcast.)

Listen to Part 2: Episode 118



Transcript of Podcast Episodes 117 and 118
On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”), fulfilling one of his campaign pledges to provide additional COVID-19 pandemic relief. ARPA provides $1.9 trillion to struggling Americans and businesses and is the second largest relief bill after last year’s $2.2 trillion Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted in March 2020. Unfortunately, the bill’s passage was not a result of the bipartisanship that President Biden also pledged he would work on. Not one Republican member of the Senate or House voted in favor of the law. Nevertheless, ARPA brings needed relief to the many who were left jobless, furloughed, struggling to pay rent, or otherwise financially and adversely affected by the pandemic.
Since the law was just enacted and there are numerous provisions, additional details will need to wait for future guidance issued by the IRS and Department of Treasury, but here’s a summary of some of the key provisions as we understand them today.



1. Stimulus Payments
You may recall that the first Economic Impact Payment (i.e., “stimulus payment”) of up to $1,200 to eligible individuals was a result of the CARES Act. At the end of 2020, the Consolidated Appropriations Act of 2021 (“CA Act”) was enacted, which provided many adult Americans with an additional stimulus payment of up to $600. That stimulus payment was decried as wholly inadequate, and President Biden promised to provide additional stimulus payments to eligible individuals. ARPA officially designates the stimulus payments as 2021 Recovery Rebates, which are an advance of a 2021 income tax credit. ARPA provides an additional $1,400 per qualifying household member. For example, a married couple with two children may receive up to $5,600. By comparison, that is more than the $3,400 maximum payment from the CARES Act and the $2,400 from the CA Act.
There are, however, some major differences in the eligibility for this third round of stimulus payments. Under ARPA, dependents could include children age 17 and older, including college students age 23 and younger, as well as elderly or infirm family members living in the household as dependents. For children, under the CARES Act and CA Act, the definition of a dependent child relied upon eligibility for a child tax credit and hence was limited to ch...