The American Rescue Plan is a $1.9 trillion federal spending law that President Biden signed on March 11, 2021, to address the economic damage of the COVID-19 pandemic. It sent stimulus checks, temporarily supercharged tax credits for families and low-wage workers, extended unemployment benefits, cut the cost of health coverage, and pushed hundreds of billions of dollars to state and local governments, small businesses, schools, renters, and homeowners. Most of its provisions were short-lived, but a handful reshaped federal programs and a few spending deadlines still stretch into 2026 and 2027.
Stimulus Checks
The law authorized a third round of Economic Impact Payments worth up to $1,400 per eligible person. Married couples filing jointly got up to $2,800, and each qualifying dependent added another $1,400 to the household total. For the first time, adult dependents like college students and elderly relatives counted.1U.S. Department of the Treasury. Economic Impact Payments
Payments phased out by income. Single filers got the full amount up to $75,000 in adjusted gross income and nothing above $80,000. Heads of household qualified in full up to $112,500 and cut off at $120,000. Joint filers received the full payment below $150,000 and lost it entirely at $160,000. Those thresholds were tighter than the first two rounds.1U.S. Department of the Treasury. Economic Impact Payments
Anyone who missed their check could claim it as a Recovery Rebate Credit on a 2021 federal return. That window has closed. Taxpayers who never filed a 2021 return had until April 15, 2025, to submit one and collect the credit.
Expanded Child Tax Credit
For 2021 only, the law raised the Child Tax Credit from $2,000 per child to $3,600 for children under six and $3,000 for children aged six through seventeen. It also made the credit fully refundable, so families who owed no federal income tax still received the full amount.2U.S. Department of the Treasury. Child Tax Credit
Half of the credit was delivered in advance as monthly payments from July through December 2021, up to $300 per month for each child under six and up to $250 for each older child. Families claimed the rest on their tax return.2U.S. Department of the Treasury. Child Tax Credit
The expanded amounts began phasing down for single filers above $75,000 and joint filers above $150,000.3Internal Revenue Service. Calculation of the 2021 Child Tax Credit
The expansion ended after 2021. For 2026, the Child Tax Credit is $2,200 per child, with a refundable portion capped at $1,700. Families need at least $2,500 in earnings before that refundable portion phases in, so the lowest-income households still receive a reduced credit or none at all.
Expanded Earned Income Tax Credit for Childless Workers
The law also temporarily expanded the Earned Income Tax Credit for workers without qualifying children. For 2021, it roughly tripled the maximum credit for childless workers and opened eligibility to people as young as 19 (or 24 if a full-time student) and those 65 and older. That was a one-year change. In 2026, the usual age rules apply again: to claim the EITC without a qualifying child, you must be at least 25 and under 65 at the end of the tax year.4Internal Revenue Service. Who Qualifies for the Earned Income Tax Credit (EITC)
Unemployment Benefits
The law extended three federal unemployment programs through September 6, 2021. Federal Pandemic Unemployment Compensation continued the $300 weekly supplement on top of state benefits. Pandemic Emergency Unemployment Compensation kept paying additional weeks to people who had exhausted state benefits. Pandemic Unemployment Assistance, which covered gig workers and independent contractors who don’t usually qualify for state unemployment, continued with a maximum duration of 79 weeks.5U.S. Department of Labor. U.S. Department of Labor Issues New Guidance to States on Implementing American Rescue Plan Act Unemployment Insurance Provisions6U.S. Department of Labor. Unemployment Insurance Program Letter No. 16-20, Change 6 All three programs expired in September 2021, and many states cut off the federal supplement earlier.
The law also delivered a retroactive tax break on 2020 unemployment income. Households with modified adjusted gross income under $150,000 could exclude up to $10,200 of unemployment benefits from taxable income. For couples filing jointly, each spouse could exclude up to $10,200, shielding as much as $20,400 total.7Internal Revenue Service. 2020 Unemployment Compensation Exclusion FAQs
People later found to have been overpaid pandemic unemployment could request a waiver. A state could grant one only if the overpayment wasn’t the recipient’s fault and repayment would cause financial hardship or be otherwise unfair. Fraud overpayments could not be waived.8U.S. Department of Labor. Unemployment Insurance Program Letter No. 20-21, Change 1
Health Insurance Help
The law made ACA marketplace coverage cheaper by temporarily removing the income cap on premium tax credits, which had previously cut off at 400% of the federal poverty level. It also reduced the share of income that households at every level were expected to contribute toward premiums, so subsidies stretched further and reached higher earners for the first time.
The Inflation Reduction Act later extended these enhanced subsidies through December 31, 2025. They expired at the end of 2025. In January 2026 the House passed legislation to revive them for three more years, but whether that becomes law is unresolved as of this writing.
Workers who lost their jobs or had their hours cut also received a 100% COBRA premium subsidy from April through September 2021, letting them keep their employer plan at no cost for up to six months. The subsidy ended if the person became eligible for another group plan or Medicare.
Small Business Grants and Loans
The Restaurant Revitalization Fund provided $28.6 billion in grants for restaurants, bars, food trucks, caterers, and similar businesses hit by pandemic revenue losses. Grants ran up to $10 million per business and $5 million per location, with no repayment required for eligible costs like payroll, rent, and utilities.9Government Accountability Office. Restaurant Revitalization Fund: Opportunities Exist to Improve Oversight Demand overwhelmed supply. The SBA received roughly 278,000 applications and could fund about 101,000 before the money ran out.
Live performance venues, movie theaters, and similar businesses drew on the Shuttered Venue Operators Grant program, which received more than $16 billion across the original appropriation and ARP funding. Eligible applicants received grants equal to 45% of 2019 gross revenue, up to $10 million.10U.S. Small Business Administration. About SVOG
The law added $7.25 billion to the Paycheck Protection Program for forgivable loans, though PPP closed to new applications shortly after. The Economic Injury Disaster Loan program received $15 billion. And the State Small Business Credit Initiative was reauthorized with $10 billion to help states support small-business lending.11Government Accountability Office. State Small Business Credit Initiative: Treasury Made Progress on Program Implementation
Money for State and Local Governments
The Coronavirus State and Local Fiscal Recovery Funds sent $350 billion to state, local, territorial, and tribal governments to blunt the pandemic’s budget damage.12U.S. Department of the Treasury. State and Local Fiscal Recovery Funds Governments could spend the money on four broad purposes:
- Public health response and aid to households and businesses affected by the pandemic.
- Replacing revenue lost during the downturn so agencies could keep providing services.
- Premium pay for essential workers, up to $13 per hour and capped at $25,000 per worker.
- Water, sewer, and broadband infrastructure.
Governments had until December 31, 2024, to obligate their allocations. Final expenditure reports are due April 30, 2026, and Treasury continues to monitor compliance and recover misspent funds.
Rent and Mortgage Help
The law authorized $21.55 billion for a second round of Emergency Rental Assistance (ERA2), on top of $25 billion already provided by the prior Consolidated Appropriations Act. The money helped renters cover back rent, current rent, and utility bills, generally for households earning below 80% of area median income who could show pandemic-related hardship.13U.S. Department of the Treasury. Emergency Rental Assistance Program Most state and local programs have exhausted their allocations or closed, with final program dates generally falling between late 2025 and early 2026.
The Homeowner Assistance Fund received roughly $10 billion to help homeowners struggling with mortgage payments, property taxes, insurance, and utilities.14U.S. Department of the Treasury. Homeowner Assistance Fund This is one of the few ARP programs with a spending window still open: states must obligate remaining HAF funds by September 30, 2026, and any obligations made by that date must be fully spent by January 30, 2027.15U.S. Department of the Treasury. HAF Closeout Promising Practices If your state still has HAF money available, the window is closing.
Food and Education Funding
The law extended a 15% increase in Supplemental Nutrition Assistance Program benefits through September 2021, roughly $28 more per person per month. Without the extension the boost would have ended in June. USDA estimated the extension delivered about $3.5 billion in additional food assistance to more than 41 million people. Pandemic EBT, which replaced free school meals for families whose children lost in-person school access, was also extended through the summer of 2021.16U.S. Department of Agriculture. American Rescue Plan Fact Sheet
The law also directed roughly $123 billion to K-12 schools through the Elementary and Secondary School Emergency Relief Fund and about $40 billion to colleges and universities through the Higher Education Emergency Relief Fund. Districts had to spend at least 20% of their K-12 allocation on learning recovery. Most of this money carried spending deadlines in late 2024 and 2025, and most districts have drawn down their allocations.
Fraud Enforcement and Records
The scale of ARP spending made fraud enforcement a lasting federal priority. The Department of Justice has pursued criminal wire fraud and money laundering charges tied to false applications for Restaurant Revitalization Fund grants, PPP loans, and other pandemic relief, and a new DOJ division for national fraud enforcement was announced in January 2026 to coordinate work across programs. The Small Business Administration has suspended borrowers suspected of fraud from future loan programs.17U.S. Department of Justice. Former Nye County Commissioner Indicted For COVID-19 Relief Fraud Totaling More Than $500,000
If you received ARP funds through any business grant or loan program, keep your records. Restaurant Revitalization Fund recipients were required to hold financial records for three years after filing their final report, and any open audit or investigation extends that requirement until the matter is resolved. The broader federal record-retention standard under 2 CFR 200.334 calls for keeping records for three years from the date of the final expenditure report. With investigations still active, discarding records early is a serious mistake.