The American Rescue Plan Act of 2021 was a roughly $1.9 trillion federal pandemic-recovery law that President Biden signed on March 11, 2021. It sent $1,400 stimulus payments to most households, temporarily expanded the Child Tax Credit, extended unemployment benefits, subsidized health coverage, funded grants for hard-hit small businesses, and directed hundreds of billions to state and local governments and to housing aid. Most of the programs have expired. A few funding streams and record-keeping duties remain active into 2026.
The $1,400 Stimulus Payments
The third round of Economic Impact Payments gave eligible individuals up to $1,400 and married couples filing jointly up to $2,800, plus $1,400 for each dependent regardless of age. That last piece was new: college students claimed as dependents and adults with disabilities counted this time, after being excluded from earlier rounds.1Office of the Law Revision Counsel. 26 U.S. Code 6428B – 2021 Recovery Rebates to Individuals
Payments phased out faster than in prior rounds. Single filers received the full amount up to $75,000 of adjusted gross income and nothing above $80,000. Heads of household phased out between $112,500 and $120,000. Joint filers were cut off entirely at $160,000. Recipients needed a valid Social Security number, though mixed-status households qualified when at least one spouse had an SSN. The IRS used 2019 or 2020 returns, whichever was most recent, to size each payment.1Office of the Law Revision Counsel. 26 U.S. Code 6428B – 2021 Recovery Rebates to Individuals
Anyone shorted could claim the difference as a Recovery Rebate Credit on a 2021 return, but the filing window for that credit closed on April 15, 2025. Unclaimed third-round payments are no longer recoverable.2Internal Revenue Service. IRS Reminds Eligible 2020 and 2021 Non-Filers to Claim Recovery Rebate Credit Before Time Runs Out
The Expanded Child Tax Credit
For the 2021 tax year only, ARPA raised the Child Tax Credit to $3,600 per child under six and $3,000 per child aged six through 17, up from the standard $2,000. The enhanced amounts began phasing out at $75,000 for single filers and $150,000 for joint filers.
The bigger structural change was making the credit fully refundable. Before ARPA, families with little or no federal income tax liability could only claim a partial credit, which shut the poorest households out of the full benefit. Full refundability meant a family owing no tax could still receive every dollar. Researchers widely credited this change with a sharp temporary drop in child poverty during 2021.
The IRS also paid out half the credit as monthly advances from July through December 2021, up to $300 per month for younger children and $250 for older ones, with the balance claimed on the family’s 2021 return. After 2021 the credit reverted to $2,000 per child, and no permanent expansion has been enacted as of early 2026.
Unemployment Benefits and the 2020 Tax Break
ARPA extended the $300 weekly Federal Pandemic Unemployment Compensation supplement through September 6, 2021.3Congress.gov. Unemployment Insurance Provisions in the American Rescue Plan Act of 2021 It also carried Pandemic Unemployment Assistance, which covered self-employed and gig workers, and Pandemic Emergency Unemployment Compensation, which added weeks for people who had exhausted state benefits, through the same date. More than two dozen states ended participation early over the summer of 2021.
A separate provision addressed 2020, not 2021. Households with modified adjusted gross income below $150,000 could exclude the first $10,200 of unemployment compensation received in 2020 from taxable income, with each spouse on a joint return eligible to exclude up to $10,200 of their own benefits. This kept many workers from an unexpected tax bill on benefits they had already spent.4Internal Revenue Service. 2020 Unemployment Compensation Exclusion FAQs
Health Coverage: COBRA and Marketplace Subsidies
From April through September 2021, ARPA fully subsidized COBRA continuation premiums for workers who lost employer-sponsored coverage through involuntary job loss or reduced hours. Employers paid the premiums upfront and recovered the money as a refundable credit against payroll taxes.5Office of the Law Revision Counsel. 26 USC 6432 – COBRA Premium Assistance
For people buying coverage on the Affordable Care Act marketplace, the law temporarily enhanced the Premium Tax Credit in two ways. It reduced the share of income households had to put toward premiums, which brought many benchmark plans to zero dollars per month. It also removed the 400%-of-poverty income cap that had previously created a subsidy cliff. The Inflation Reduction Act extended these enhancements through the end of 2025.
As of January 1, 2026, the enhanced credits have expired and marketplace premiums have reverted to pre-ARPA subsidy levels. Competing bills to restore them are moving through Congress, but none has been enacted as of early 2026. Enrollees who budgeted around the enhanced credits may see substantially higher premiums for the current plan year.
Small Business Grants and Loans
ARPA targeted the industries hit hardest by shutdowns rather than relying on broad lending alone.
The Restaurant Revitalization Fund put $28.6 billion into grants for restaurants, bars, food trucks, and similar businesses that could show pandemic-era revenue losses. Recipients who spent the money on eligible costs like payroll, rent, and supplies owed nothing back.6Congress.gov. SBA Restaurant Revitalization Fund Grants The SBA received more than 370,000 applications and funded roughly a third before the money ran out.
Live entertainment venues, theaters, and cultural institutions received an additional $1.25 billion through the Shuttered Venue Operators Grant program, which covered operational costs including payroll, rent, utilities, and contractor fees.7Small Business Administration. Compliance Supplement 2024 – Shuttered Venue Operators Grant8U.S. Small Business Administration. About the Shuttered Venue Operators Grant The Paycheck Protection Program got additional funding to keep issuing forgivable loans aimed at retaining workers on payroll.9U.S. Department of the Treasury. Paycheck Protection Program Loan Forgiveness For Borrowers
One small business program is still active. ARPA allocated nearly $10 billion to the State Small Business Credit Initiative, which routes federal money through state programs to provide capital to startups and small businesses through loan participation, loan guarantees, and venture capital support. SSBCI funding continues to be deployed into 2026.10U.S. Department of the Treasury. State Small Business Credit Initiative
State, Local, Tribal, and Territorial Funds
The Coronavirus State and Local Fiscal Recovery Funds program directed roughly $350 billion to state, local, territorial, and tribal governments. Eligible uses included public health response, replacing lost revenue, premium pay for essential workers, and investment in water, sewer, and broadband infrastructure. A 2023 interim rule added surface transportation projects to the permitted uses.11U.S. Department of the Treasury. Eligible Uses
Recipients had to obligate all SLFRF funds by December 31, 2024, or return the unobligated balance to Treasury. Governments that met the obligation deadline still have time to complete spending, but the program is now in its wind-down and compliance phase.12U.S. Department of the Treasury. SLFRF Self-Service Resources
Rental and Homeowner Assistance
ARPA put over $30 billion toward stabilizing housing. The Emergency Rental Assistance Program received $21.55 billion on top of $25 billion from earlier legislation, flowing through state and local governments to cover rent, utilities, and other housing costs for eligible tenants. Payments generally went directly to landlords or utility companies.13U.S. Department of the Treasury. Emergency Rental Assistance Program
The $9.961 billion Homeowner Assistance Fund helped homeowners at risk of foreclosure due to pandemic-related hardship, covering mortgage payments, property taxes, insurance, and related costs. By March 2023 the program had paid out roughly $3.7 billion to more than 318,000 homeowners, with nearly half of the assistance reaching households earning below 50% of area median income.14U.S. Department of the Treasury. Homeowner Assistance Fund15U.S. Department of the Treasury. New Treasury Department Data Shows Homeowner Assistance Fund Helped Keep More Than 300,000 Families In Their Homes Most ERA programs have now closed or exhausted their funding, though a handful of jurisdictions are still administering remaining balances.
If You Received ARPA Money, Keep the Records
Federal regulations require grant recipients to retain financial records, supporting documents, and related records for at least three years from the date they submit their final expenditure report. If an audit, litigation, or unresolved claim is pending when that three-year window would otherwise close, records must be kept until the matter is resolved.16eCFR. Record Retention Requirements
Federal inspectors general are still investigating fraud in PPP loans, Restaurant Revitalization Fund grants, and other ARPA-funded programs, with enforcement actions continuing into 2026. If you received ARPA funding of any kind, hold onto your documentation until you are well past the retention window and have confirmed no audit or compliance review is open.