American Rescue Plan Act Enacted: On 3/11/21, President Biden signed the American Rescue Plan Act of 2021 (P.L. 117-2), which provides for $1.9 trillion in relief funds. In addition to the expansion of some personal credits and unemployment exclusions, the bill provides $1,400 ($2,800 for eligible individuals filing a joint return) plus $1,400 for each dependent of the taxpayer.
The credit will be ratably phased out between $150,000 and $160,000 of AGI for joint filers, $112,500 and $120,000 for heads of household, and $75,000 and $80,000 for all other taxpayers. The credit rebate is treated as an overpayment on the 2019 return (or 2020, if that return has been filed).
The bill adds $300 to extended weekly unemployment payments through 9/6/21 and extends the employee retention credit from 6/30/21 to 12/31/21. The paid sick and family leave credits are extended from 3/31/21 to 9/30/21. Additional funds have been allocated to the Paycheck Protection Program (PPP); however, the application period has not been extended and remains 3/31/21.