American Rescue Plan
- DIRECT PAYMENTS: Frequently Asked Questions on 3rd Round of Stimulus Checks
- UNEMPLOYMENT COMPENSATION: Expansion of Unemployment Benefits
- DIRECT FUNDING: State and Local Governments | Guidance from the U.S. Deaprtment of the Treasury
- EXPANDED CHILD TAX CREDIT: How it Works | FACT SHEET AND FAQ: Child Tax Credit Portals
- EXPANDED INCOME TAX CREDIT: For Workers Without Children
- BLACK FARMERS DEBT RELIEF | AMERICAN RESCUE PLAN DEBT PAYMENTS FAQs
- ACA TAX SUBSIDIES
- EMERGENCY RENTAL ASSISTANCE
- FOOD ASSISTANCE
- SMALL BUSINESSES: Available Resources | Small Business Administration Shuttered Venue Operators Grant Fact Sheet
- NONPROFIT ORGANIZATIONS
- EDUCATORS AND STUDENTS
On March 11, 2021, Congress passed and President Biden signed into law “The American Rescue Plan”, (H.R. 1319) is a $1.9 trillion law that provides urgently needed resources to defeat the virus, put vaccines in people’s arms, money into families’ pockets, children safely back into classrooms and people back to work.
Since the beginning of the COVID-19 pandemic, I have been singularly focused on ensuring that my constituents have access to every resource necessary to weather this pandemic. I was the only member of the Alabama Congressional Delegation to proudly vote in favor of the American Rescue Plan because Alabama families, small businesses, and frontline workers can no longer wait for relief from this public health and economic crisis. I want my constituents and all Americans to know that help is HERE!
You can find more information about many of the critical programs in the American Rescue Plan below.
FAQ for 3rd Round of Stimulus Checks (as of March 2021)
- Who is eligible for Economic Impact Payments?
- All legal residents of the United States who fall within the income caps outlined below are eligible for direct payments. This includes adults, children, and adult dependents, such as college students and elderly relatives. Adult dependents were ineligible for previous rounds of stimulus checks.
- Americans with incomes up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive a direct payment of $1,400 per person. Families will receive an additional $1,400 per child under 17 and per each adult dependent.
- Individuals with incomes between $75,000 and $80,000 (and between $150,000 and $160,000 for joint filers) will receive a reduced payment, and filers above those income limits are not eligible for direct payments.
- You can estimate your family’s total payment using the following tool: Online Calculator
- When will I receive my EIP?
- The Treasury Department is working to distribute EIPs as quickly as possible. We expect individuals who have shared direct deposit information with the IRS will receive their payment the most quickly, and many of these payments have already been disbursed.
- Individuals without direct deposits will receive payment through a check or debit card in the mail. Those receiving a check or debit card should closely watch their mail for an envelope prominently displaying the seal of the U.S. Treasury Department.
- Individuals are encouraged to use the IRS Get My Payment tool to check the status of their EIP.
- Will I receive a stimulus check if I haven’t filed my taxes for 2019 or 2020?
- Yes. Non-filers are encouraged to fill out the IRS Free File Form in order to claim their stimulus payment, even if they aren’t required to file taxes and did not file for 2019 or 2020.
- Will I have to pay taxes on my EIP?
- No, your payment is not subject to federal taxation and will not be taken out of your federal tax refund.
- Will my EIP be garnished to pay previous debts?
- Your payment cannot be garnished for debt related to federal taxes or debts, state taxes, child support payments, or unemployment compensation debts.
- However, private debt may be vulnerable to garnishment. Congresswoman Sewell is fighting to pass legislation to prevent private debt collectors from garnishing Economic Impact Payments.
- How will I receive my direct payment if I have moved or if my bank account is no longer open?
- If your direct deposit changed recently, your EIP will be rerouted back to the IRS and the agency will send you a check or debit card to the address they have on file.
- If you have moved, you should notify the IRS of your new address through one of the methods on their website: IRS Change of Address.
- Note: The IRS is continuing to provide updates on EIPs. We will update this FAQ as more information becomes available, and we encourage you to visit the IRS website for the latest information.
Unemployment Benefits (as of March 2021)
The American Rescue Plan extends the $300 federal increase in unemployment insurance through September 6, 2021, and continues eligibility for contract workers, self-employed workers, and nonprofit employees. Nonprofits will now receive a reimbursement rate of 75% rather than 50%.
Notably, the legislation exempts from federal taxation the first $10,200 in unemployment benefits received. More information about this income exclusion can be found here: Unemployment Compensation and Tax Filing
In order to file an unemployment insurance claim, you are encouraged to contact the Alabama Department of Labor.
Direct Funding to State and Local Government (as of May 2021)
For all questions about how counties, cities, and towns can apply for Coronavirus State and Local Fiscal Recovery Funds, how the funds can be spent, and when funds will be received, please visit the U.S. Department of the Treasury’s webpage here.
The American Rescue Plan provides direct funding to States, Counties, and Municipalities to help combat the Covid-19 pandemic. Many states have sustained massive revenue shortfalls and face a host of increased spending requirements. The need is particularly pronounced at the local level: a National League of Cities survey showed a 21-percent revenue decline among cities with losses and the National Association of Counties projected a 20-percent revenue decline.
Our cities and counties are on the front lines in the fight against the COVID pandemic, and they need direct assistance to develop local vaccination plans, pay frontline employees overtime and hazard pay, offset revenue losses, bolster economic recovery, and continue to offer essential services to our families and neighbors.
Estimated Funding for State of Alabama, Cities, and Counties:
- State of Alabama - $2.12 billion
- City of Bessemer - $14.72 million
- City of Birmingham - $148.82 million
- City of Montgomery - $42.14 million
- City of Tuscaloosa - $20.52 million
- City of Selma - $3.19 million
- Choctaw County - $2.44 million
- Clarke County - $4.58 million
- Dallas County - $7.21 million
- Greene County - $1.57 million
- Hale County - $2.84 million
- Jefferson County - $127.73 million
- Lowndes County - $1.89 million
- Marengo County - $3.66 million
- Montgomery County - $43.93 million
- Perry County - $1.73 million
- Pickens County - $3.87 million
- Sumter County - $2.41 million
- Tuscaloosa County - $40.60 million
- Wilcox County - $2.01 million
*All Funding Numbers Above Are Estimates*
Expanded Child Tax Credit (CTC) for 2021: How It Works (as of July 2021)
The American Rescue Plan provides direct payments in the form of a ‘child allowance’ to every low-income family. Rep. Sewell has been fighting in Congress for years to provide these payments for families and to uplift Alabamians out of poverty. These payments are an expansion of the Child Tax Credit, a program which previously excluded millions of low-income children but is now expected to benefit 1 million more children throughout Alabama.
Beginning July 15, 2021, eligible families will receive advance monthly payments of $300 per child under the age of 6 and $250 per child under the age of 18. Families will receive the remainder of their CTC when they file their 2021 tax return.
All working families will get the full credit if they make up to $150,000 for a couple or $112,500 for a family with a single parent (also called Head of Household).
If you’ve filed tax returns for 2019 or 2020, or if you signed up to receive a stimulus check from the Internal Revenue Service, you will get this tax relief automatically. You do not need to sign up or take any action. Families who did not file income taxes in 2019 or 2020 and did not sign up for a stimulus check can use the IRS' non-filer tool to sign up for Child Tax Credit monthly payments by clicking here.
Payments will be directly deposited into your bank account every month from July to December 2021. If the IRS does not have your direct desposit information on file, they will mail you a check.
In the State of Alabama, the Child Tax Credit is expected to:
- Benefit 91% of children (or 1,004,200)
- Impact 316,400 households
- Lift 82,700 children out of poverty
- Lift 43,100 children out of deep poverty
In Alabama’s 7th District, the Child Tax Credit is expected to:
- Benefit 93.5% of children (or 138,300)
- Impact 43,700 households with an average benefit of $3,200 per household
- Lift 14,200 children out of poverty
- Lift 7,200 children out of deep poverty
According to an analysis by the Center on Poverty and Social Policy at Columbia University, the expanded Child Tax Credit could cut child poverty in the United States by more than half.
Watch out for scams
According to IRS.gov: “The IRS urges everyone to be on the lookout for scams related to both Advance Child Tax Credit payments and Economic Impact Payments. The IRS emphasized that the only way to get either of these benefits is by either filing a tax return with the IRS or registering online through the Non-filer Sign-up tool, exclusively on IRS.gov. Any other option is a scam.
Watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS never sends unsolicited electronic communications asking anyone to open attachments or visit a non-governmental web site.”
For more information and frequently asked questions, click here. For Rep. Sewell's press release on the Child Tax Credit, click here.
Expanded Earned Income Tax Credit (EITC) for Workers without Children (as of March 2021)
The Earned Income Tax Credit (EITC) is an important wage subsidy program for low-income workers. The American Rescue Plan Act expands the program by nearly tripling the maximum EITC benefit for workers without children from roughly $540 to roughly $1,500, and the income cap for these adults to qualify from about $16,000 to at least $21,000. It also expands the age range of eligible workers without children to include younger adults aged 19-24 (excluding students under 24 who are attending school at least part time), as well as people aged 65 and over.
In order to receive your Earned Income Tax Credit, you must file a federal income tax return. Those who do not file a federal income tax return cannot receive the EITC. The expanded EITC benefits accrue during the 2021 tax year and will be reflected in your 2021 federal tax return.
For more information on how the expansion of the Earned Income Tax Credit will reduce poverty in America, please read more on the Center for Budget and Policy Priorities website.
Debt Relief for Black Farmers in the ARP (as of March 2021)
Relief for Black Farmers - Section 1005 of the American Rescue Plan (ARP)
The American Rescue Plan includes two provisions to provide needed relief to Black, Indigenous, and Farmers of Color. First, the bill provides $4 billion in debt relief for certain USDA farm loans. Second, $1 billion is allocated to allow the Secretary of Agriculture to provide training, technical assistance and other assistance to black farmers and other farmers of color, as well as community-based organizations and the 1890 and 1994 Land Grants and other minority serving institutions.
Decades-long discrimination against farmers and ranchers of color by the USDA in its administration of farm loan programs and other safety net programs is well-documented, and we still see the effects of that discrimination today.
This pandemic did not affect all farmers and ranchers the same way. Due to longstanding discriminatory practices by the USDA, farmers of color have not had equal access to credit and other USDA safety net programs and are at risk of losing their farm due to the pandemic.
Data from USDA shows a disproportionate percentage of the $50 billion in Federal payments to agricultural producers to offset the effects of COVID-19 and the trade war went to white farmers.
Section 1005 in the American Rescue Plan is tailored to provide relief for socially disadvantaged farmers and ranchers with outstanding USDA FSA indebtedness.
Socially disadvantaged farmers and ranchers, as defined in the Food, Agriculture, Conservation, and Trade Act of 1990, with existing Farm Service Agency (FSA) farm loan debt. These are farmers or ranchers who have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.
Types of Loans Covered:
Debt relief in the ARP agriculture section is only for USDA direct and guaranteed farm loan debts as of January 1, 2021. It does not address “non-Federal” debt unless it is an FSA guaranteed loan with a commercial bank or Farm Credit System institution.
The loans covered are:
1) Commodity Credit Corporation Farm Storage Facility Loan Program
2) Direct and guaranteed loans administered by the FSA under subtitle A, B, or C of the Consolidated Farm and Rural Development Act, which include:
- Emergency loans
- Farm ownership loans
- Farm operating loans
- Soil and Water loans
- Conservation loans
Implementation of Debt Relief:
The American Rescue Plan (ARP) was signed into law on March 11th, and we are awaiting details from USDA on how they will implement the provisions.
The debt relief in the American Rescue Plan provides up to 120 percent of outstanding indebtedness, as of January 1, 2021, on certain direct or guaranteed farm loans. Amounts remaining after debt obligations to the USDA or guaranteed lender are paid off are provided to the farmer or rancher to account for the tax implication of the debt relief. Debt relief would not affect the eligibility of farmers or ranchers for farm loans.
Summary of Training, Technical Assistance, and other Assistance Provisions:
The American Rescue Plan provides $1.01 billion to the Secretary of Agriculture for assistance to socially disadvantaged farmers, ranchers, and forest landowners who have historically faced discrimination by USDA, with such assistance provided directly to producers and through community-based organizations, land-grant universities, and other minority serving institutions of higher learning. These funds will support:
- Outreach, financial training, cooperative development and capacity building, and other technical assistance to socially disadvantaged groups;
- Grants and loans to improve land access, including heirs’ property issues, and aid former farm loan borrowers that suffered adverse actions or past discrimination or bias;
- The creation and activities of equity commissions;
- Research, education, and extension activities at minority serving institutions, including scholarships, internships, and pathways to Federal employment for students; eligible institutions include 1890 Land-Grant Institutions, 1994 Tribal Land-Grant Colleges and Universities, Alaska Native/Native Hawaiian Serving Institutions, Hispanic-Serving Institutions, and Insular Area Institutions.
For more information on agricultural provision in the American Rescue Plan, please visit the USDA’s website.
Increase in ACA Tax Subsidies in the ARP (as of March 2021)
The American Rescue Plan (ARP) provides critical support for consumers and families who have lost their health insurance by making significant improvements in access to and affordability of health coverage through the Affordable Care Act (ACA) Marketplace for 2021 and 2022. The ARP accomplishes this by increasing eligibility for financial assistance to help pay for Marketplace coverage with lower premiums and expanding access to financial assistance for more consumers.
- Starting April 1, 2021, many people who buy their own health insurance directly through the Marketplace will become eligible to receive increased tax credits to reduce their premiums.
- These savings will lead to decreased premiums, on average, by $50 per person per month or by $85 per policy per month. Four out of five enrollees will be able find a plan for $10 or less per month after premium tax credits, and over 50% will be able to find a Silver plan for $10 or less per month.
The tax credit calculation uses a percentage of a consumer’s or household’s income that is needed to spend on monthly health insurance premiums, which is based on how much the household income compares to the federal poverty levels (FPL). For the consumers and households that are eligible for premium tax credits, an individual or a family’s tax credit amount is calculated based on the following factors:
- Household’s total expected income for the year.
- Total number of people in the household that file taxes together.
- The premium amount of the second-lowest cost Silver plan in the consumer’s area in the Marketplace. This is the “benchmark” plan cost used to calculate premium tax credits. It’s not related to which plan a consumer chooses to enroll in.
Consumers and households with incomes below 400% FPL had to spend up to 9.83% of their income to pay for health insurance premiums to be eligible for premium tax credits based on the cost of the benchmark plan. These consumers could then choose to enroll in plans that cost more or less than the benchmark plan, but the amount of their tax credit was based on the percentage of their income and the cost of the benchmark plan’s monthly premium.
Consumers and households with incomes above 400% FPL were not eligible to receive premium tax credits, known as the “subsidy cliff.”
Changes Under the ARP
This year, individuals and families will be eligible for a temporary increase in premium tax credits, with no one paying more than 8.5%, as opposed to 9.83%, of their household income towards the cost of the benchmark plan or a less expensive plan. This decrease will allow many consumers to be eligible for higher tax credit amounts to help cover their Marketplace health plan premiums.
The ARP also removes the “subsidy cliff,” meaning that those individuals and families with household incomes above 400% FPL may still be able to receive tax credits to help cover Marketplace health plan premiums.
Access is further expanded under the ARP by ensuring that taxpaying consumers who receive unemployment compensation during 2021 may also be eligible to receive premium tax credits to help cover Marketplace health plan premiums. These individuals will be treated as if their income were well below 400% FPL, meaning they will be able to purchase an ACA silver plan without having to pay a premium.
Emergency Rental Assistance in ARP (as of March 2021)
The American Rescue Plan (ARP) provides an additional $21.6 billion for an Emergency Rental Assistance program to help renters pay their rent and utility bills during the COVID-19 pandemic.
Eligible tenants must:
- Have a valid rental agreement in their name
- Household’s total gross income cannot exceed 80% Area Median Income for location
- The household has experienced a loss of income due to COVID-19, such as unemployment, reduced working hours, inability to find childcare during the pandemic, or loss of spousal/child support.
On May 19, 2021, the U.S. Department of the Treasury released a new tool to connect renters with Emergency Rental Assistance programs through the American Rescue Plan Act of 2021. The tool comes in the form of an index, which can be found here, of websites associated with grantees’ rental assistance programs to help tenants and landlords find programs in their areas.
Funds are being disbursed at the local level, and Alabamians can find out more about the availability and application process at Emergency Rental Assistance Alabama.
Note that after March 31, Alabama’s largest counties will be providing a separate application process for their residents. These communities include Baldwin, Madison, Mobile, Montgomery, Tuscaloosa, and Jefferson Counties, and the cities of Huntsville and Birmingham. We will update information about those application processes in Alabama’s 7th Congressional District as more information becomes available.
Extended Food Assistance in ARP (as of March 2021)
The American Rescue Plan extends food assistance to needy families and provides bold solutions to address the hunger crisis in Alabama and across the nation. Specifically, the American Rescue Plan includes the following provisions:
- Access to the Pandemic EBT (P-EBT) program available for the duration of the health emergency, including through the summer, to allow families with children receiving school meals to purchase healthy food more easily during the pandemic.
- An extension to the 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits for all participants through September 30, 2021, or about $28 per month per person, with $1.15 billion allocated for the cost of state administrative expenses.
- Investments in technological improvements to expand access for families to use their SNAP benefits to purchase groceries safely online.
- $880 million to deliver expanded access to more fruits and vegetables for moms and babies and investments in innovation to the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
- $37 million for senior nutrition through the Commodity Supplemental Food Program.
- $1 billion in nutrition assistance for the territories.
For more information about nutrition assistance, visit the USDA’s website.
More Funding and Expanded Access for Paycheck Protection Program (PPP) (as March 2021)
The ARP authorizes an additional $7.25 billion for the Paycheck Protection Program and expands access to the program for more categories of non-profit entities. The program offers forgivable loans to small businesses and nonprofit organizations for businesses that spend over 60% of the funds on payroll expenses.
While the Paycheck Protection Program is currently scheduled to expire on March 31, Congress is working to extend this deadline and provide flexibility for borrowers and lenders.
For more information on the Paycheck Protection Program, please visit the Small Business Administration’s Website.
Expansion of SBA’s Economic Injury Disaster Loan (EIDL) Program (as of March 2021)
The American Rescue Plan allocates $15 billion for the Targeted EIDL Advance program. This program is specifically for EIDL applicants in low-income communities who previously received a partial EIDL Advance (less than the $10,000 maximum amount) or who applied but did not receive any funds due to a lack of programmatic funding.
No action from applicants is necessary at this time. The SBA will proactively reach out to eligible businesses about additional relief.
New SBA “Restaurant Revitalization Grant” Program in ARP (as of March 2021)
The American Rescue Plan authorizes $28.6 billion for a new grant program through the Small Business Administration to provide assistance for restaurants and other food and drink establishments. Grants will be available for up to $10 million per entity and will be calculated by subtracting 2020 revenue from 2019 revenue. Funds may be used for a wide variety of expenses including payroll, mortgage, rent, utilities, supplies, food and beverage expenses, paid sick leave, and operational expenses. Restaurants owned and operated by women, veterans, and socially or economically disadvantaged individuals will receive priority in the first 21 days of the application being open.
The application process for this grant fund is still under development. We will update this fact sheet as more information becomes available, and we encourage you to visit www.sba.gov for the latest information.
New SBA “Shuttered Venue Operators Grant” Program (as of March 2021)
The American Rescue Plan provides $1.25 billion in grants for live venue operators, including theaters, museums, live performing arts centers, and other similar facilities. Grants will be equal to 45% of gross revenues during 2019, up to a maximum amount of $10 million. Additional details about the program, including more information about eligibility for venues, can be found here.
The SBA has not opened the application portal, but they expect to begin accepting applications for the program in early April. We will update this fact sheet as more information becomes available, and we encourage you to visit www.sba.gov for the latest information.
Nonprofit Organizations (as of March 2021)
The American Rescue Plan maintains and expands resources for nonprofit organizations. The ARP expands eligibility under the Paycheck Protection Program to charitable nonprofits that operate in multiple locations and employ up to 500 employees per location. The law also makes 501(c)(6) organizations eligible for the PPP if the organization employs less than 300 workers per location. Nonprofits continue to be eligible for other Small Business Administration programs under the law, including the Economic Injury Disaster Loan (EIDL) program and the Shuttered Venue Operators Grant program.
The law also extends the federal payment for a portion of unemployment insurance costs of nonprofits, including a 50% reimbursement rate through March 31 and a 75% reimbursement level from April 1 through September 6, 2021.
Educators and Students (as of March 2021)
The American Rescue Plan provides $170 billion in funding for public education, to be used for priorities including modifying schools for social distancing and health measures, hiring critical staff, and addressing student trauma and learning loss. Additionally, the ARP allocates $7 billion to help close the digital divide by helping students access technology and WiFi capability for remote learning, with a focus on low-income students and students with disabilities. The ARP also provides $40 billion to public higher education institutions for the implementation of safety protocols and emergency financial assistance for students harmed by the pandemic.
The ARP also supports the economic wellbeing of students and educators through additional stimulus checks for adults and children, and the expanded Child Tax Credit allowance for low-income families. Further, the state and local aid in the legislation will protect educators from additional layoffs as a result of budgetary constraints.