The American Rescue Plan: What’s in there?

On March 11, President Biden signed into law one of the largest economic investments in American history, the American Rescue Plan. While there’s been a lot of conversation about what isn’t in it, notably lacking was a national Potato-and-legume gender reveal party, there is a lot to celebrate. Below is a quick breakdown of some of the financial benefits that might be relevant for folks to know about or apply for.

A lot of people get $1,400

• The third stimulus payment is going out, possibly as soon as the end of the month. For those individuals who make/declare less than $75,000 a year or couples who make less than $150,000, everyone should receive either a direct deposit or a check. The “Get My Payment” portal is temporarily closed as the IRS reviews the details of the newest bill, but keep checking back for information if you did not receive the first or second payment, or received less than you were expecting.

Am I still paying student loans?

• Student loan debt hasn’t been forgiven and Democrats are still negotiating this approach, but they declared that it will *NOT* be taxed when it happens. One of the big questions was whether or not receiving $10,000 (for example) in loan forgiveness would be taxed as if you received $10,000 that year. The American Rescue Plan passed a provision that loan forgiveness received through 2027 will not be considered part of your taxable income when that goes through. (From Forbes, Six Take-Aways for Student Loan Borrowers)
• Federal loan payments are still not being required until September 30, 2021.

Children & Families

The big take-away here is that what just passed could cut child poverty rates by almost 50%, which is something to seriously cheer about. Even brief experiences of poverty as a kid have long-lasting impacts on health and economic stability, so the benefits of this aren’t just inspiring, they’re generational.

• For folks who file taxes on their income, the Child Tax credit was increased from $2,000 per child to $3,000 per child ($3,600 for a child under age 6) and makes 17-year-olds qualifying children for the year. Also, families will get back as a refundable tax credit as much as half of their spending on child care for children under age 13, so that they can receive a total of up to $4,000 for one child or $8,000 for two or more children. If you have kids and have been using this in your taxes, this means that in the second half of this year, expect a check. (Read more in this article from SmartAsset.com on the Child Tax Credit and estimate how much you might receive.)
• The bill creates block grants (Federal money passed to each states in one single chunk, which then allows states work out the details for how it gets to you — similar to unemployment money where you apply through your state) to pay for childcare costs, as well as an emergency fund for childcare providers to pay for a range of costs that come with their work. This is the single biggest investment in childcare since World War II.
• For anyone receiving Temporary Assistance to Needy Families (TANF), the bill provides an additional $1 billion for states to cover the additional cash assistance in response to needs created by the crisis.

Addressing Economic Hardship

• The plan extends current unemployment insurance (UI) benefits and eligibility to September 6 and provides a $300 per week supplement. Also, the first $10,200 you receive in 2020 is tax-free. Last year UI was expanded to cover people in non-formal industries. Programs are administered by the state, so that’s where to look to see if you qualify (Federal page with state links)
• Over $20 billion was earmarked for rental assistance through 2027, including emergency housing vouchers. These programs started last year, but have hit major snags because of a lack of Federal guidance, and then guidance which included some potential huge barriers to applicants. Your state/city will have more information on what those programs look like, and a number of cities have already begun opening application windows. There was additional funding allocated for housing vouchers for survivors of violence, including trafficking, but that funding will be moved through service providers.
• For folks on SNAP, there was a temporary increase which averages out to be about $25 per person/per month. This will now continue through September of 2021. There is also an investment to increase the value of WIC, but I haven’t seen a clear number on how much that will mean per person yet. SNAP and WIC are food assistance — SNAP is general and WIC is for parents. If you want to see if you qualify, this is the Federal page which will direct you to state pages.

Healthcare Access:

• Your insurance premium might go down! The Plan is going to cap the cost of your plan at 8.5% of your income and remove caps on getting tax credits for the next two years. If you don’t have health insurance but want to check out if it’s an option now, go to your state’s marketplace — enrollment is open through May 15 this year because of the pandemic.
• For those who lost their job and their workplace-based healthcare, COBRA is going to be subsidized 100% until September. (For more information on COBRA)

There was a lot of other stuff in there (vaccine funding, state and local government funding, school money, pensions) — it’s a really big bill. Hopefully folks will see some relief at all levels and have something to celebrate after a very hard few years. Things are going to roll out at different speeds and there will be more bumps, but hopefully this will make the last leg of the pandemic just a little bit easier. A lot of these benefits are also based on filing taxes. If that’s something you’ve never done, it can be scary trying to get on the books, but you’re not alone, and there are people around to help.

And it’s important to keep in mind — there were zero Republican votes in the House or the Senate on this. The counter Republican plan was a fraction of this, including the size of the stimulus checks. If you’d like to send a response to your Rep and Senators for their vote (thanks or can’t wait to vote you out), please know that those comments matter. It’s also worth sending a thank you to the incredible Georgia-based organizers who made this possible by flipping the Senate in January. If you’d like to follow more Georgia organizing efforts, check out Fair Fight and their continued work to preserve democracy.

Lastly, as more and more folks are going back to work, BAWS put out an incredible harm reduction during COVID guide for a lot of different areas of the industry that’s worth a flip through.

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