The Consolidated Appropriations Act, 2021 is a roughly $2.3 trillion law that President Trump signed on December 27, 2020. It kept the federal government funded through September 30, 2021, and paired those regular appropriations with about $900 billion in pandemic relief: a second round of stimulus checks, extended unemployment benefits, more Paycheck Protection Program loans, the first federal rental assistance program, and the No Surprises Act, which took aim at surprise medical bills.
The $600 Stimulus Payments
The law authorized a second Economic Impact Payment of $600 per eligible adult and $600 per qualifying child under 17. A married couple filing jointly with no children received up to $1,200. The payments were structured as advance refundable tax credits for 2020, so they were not taxable income.
Full payments went to single filers with adjusted gross income up to $75,000, head-of-household filers up to $112,500, and joint filers up to $150,000. Above those thresholds, the payment shrank by $5 for every $100 of additional income. A single filer with no children received nothing above $87,000, and a childless couple filing jointly hit zero at $174,000. Families with children phased out at higher levels because each child added $600 before the reduction applied.
Treasury issued the payments automatically using 2019 tax return data or Social Security records. Anyone who did not receive the full amount could claim the difference as the Recovery Rebate Credit on a 2020 federal tax return. The IRS set May 17, 2024, as the deadline to file that return and claim the credit.
Extended Unemployment Benefits
The law reauthorized three federal unemployment programs first created by the CARES Act, each covering weeks of unemployment through mid-March 2021.
- Federal Pandemic Unemployment Compensation (FPUC) added $300 per week on top of state benefits.
- Pandemic Unemployment Assistance (PUA) covered workers who don’t normally qualify for state unemployment, including the self-employed, freelancers, and gig workers. Total benefits were capped at 50 weeks, and claimants had to document prior employment or self-employment.
- Pandemic Emergency Unemployment Compensation (PEUC) added weeks for workers who had used up their regular state benefits. The law raised PEUC from 13 to 24 total weeks.
All three were later extended again through September 2021 by the American Rescue Plan Act.
Small Business Relief
The law reopened the Paycheck Protection Program with a second round of forgivable loans, known as Second Draw PPP loans, for businesses that had already used an initial PPP loan and still needed help. Eligibility required 300 or fewer employees and at least a 25 percent drop in gross receipts in any quarter of 2020 compared with the same quarter in 2019.
The maximum Second Draw loan was $2 million. Most borrowers could receive 2.5 times their average monthly payroll costs. Restaurants, hotels, and other accommodation and food services businesses could receive up to 3.5 times average monthly payroll. The law also widened the list of expenses that qualified for forgiveness to include operational software, supplier costs, property damage repair, and worker safety expenses like protective equipment and facility modifications.
The PPP Tax Fix
One of the most consequential provisions resolved months of uncertainty for small businesses. The IRS had taken the position that while forgiven PPP proceeds were excluded from income, the expenses paid with those proceeds could not be deducted, which would have effectively taxed the loans through the back door. The law overrode the IRS by providing that no deduction would be denied and no tax attribute reduced because of PPP forgiveness. The IRS then issued Revenue Ruling 2021-2 declaring its prior guidance obsolete. Businesses got both tax-free forgiveness and full deductions for the expenses they paid with the money.
Shuttered Venue Operators Grants
The law created a $16.25 billion grant program for live entertainment venues, movie theaters, museums, zoos, and similar cultural institutions. Eligible operators could receive grants equal to 45 percent of their 2019 gross revenue, up to $10 million. A supplemental grant equal to 50 percent of the initial award was also available, though the combined total could not exceed $10 million. Grants covered expenses incurred between March 1, 2020, and December 31, 2021, including payroll, rent, utilities, and personal protective equipment.
Targeted EIDL Advances
Additional funding went to the Economic Injury Disaster Loan program for businesses in low-income communities. Targeted EIDL Advances provided up to $10,000 in grant money that did not have to be repaid. To qualify, a business had to be located in a low-income area, have 300 or fewer employees, and show a revenue decline of more than 30 percent during an eight-week period starting on or after March 2, 2020.
The First Federal Rental Assistance Program
Section 501 of Division N created the Emergency Rental Assistance Program with $25 billion in funding. Money flowed to states, territories, and local governments with populations over 200,000, which administered the program locally. In most cases, funds went directly to landlords and utility companies rather than tenants.
To qualify, a household’s income could not exceed 80 percent of the area median income, and at least one household member had to show a risk of housing instability through a past-due rent notice, an eviction filing, or similar documentation. Funds covered unpaid rent and utilities going back to March 13, 2020, plus future rent to stabilize housing. Local administrators could also use the money for relocation costs or temporary hotel stays in some cases.
When a landlord refused to participate or failed to respond, federal guidance required payments to go directly to the tenant. Administrators had to make documented contact attempts first. That fallback mattered because some landlords declined to engage with the program.
The No Surprises Act
Division BB of the law introduced the No Surprises Act, which took effect January 1, 2022. The core protection: if you receive emergency care, your out-of-pocket cost cannot exceed what you would have paid for in-network care, even if the hospital or the doctor treating you is outside your insurance network. The same rule applies to air ambulance services from out-of-network providers.
The protections also cover a common non-emergency scenario. If you go to an in-network hospital for a planned procedure but an out-of-network specialist handles part of your care, like an anesthesiologist or radiologist you never chose, you cannot be billed at the out-of-network rate. Before the law, those situations routinely produced bills of thousands of dollars patients had no way to anticipate.
How Payment Disputes Get Resolved
When an insurer and an out-of-network provider disagree on payment, neither can pass the dispute to the patient. They enter a 30-business-day negotiation period. If that fails, either party can submit the dispute to a certified independent entity that reviews both sides’ offers and picks one. The decision is binding, and payment must be made within 30 calendar days.
Good Faith Estimates for Uninsured and Self-Pay Patients
If you are uninsured or paying out of pocket, providers must give you a good faith estimate of expected charges before a scheduled service. Federal regulations require the estimate no later than one business day after scheduling if the appointment is at least three business days away, and within three business days for services scheduled further out. If the final bill exceeds the estimate by $400 or more, you can challenge the charges through a patient-provider dispute resolution process.
Ground Ambulances Are Not Covered
The No Surprises Act covers air ambulance services but does not protect against balance billing for ground ambulance transport. If an out-of-network ground ambulance responds to your emergency, you can still receive a surprise bill for the difference between what your insurer pays and what the ambulance company charges. Congress created an advisory committee to study the issue, but ground ambulance billing remains unregulated at the federal level.
Mental Health Parity Enforcement
The law also strengthened enforcement of mental health parity, which requires insurers to cover mental health and substance use disorder treatment no more restrictively than physical health care. Health plans must now perform and document comparative analyses showing that coverage limits for behavioral health are no stricter than limits on medical and surgical benefits. Federal regulators can request these analyses and require corrective action.
Tax and Benefits Changes
Several smaller provisions delivered targeted relief that got less attention than the headline programs.
FSA Carryover
Health FSAs normally allow only limited carryover of unused funds, and dependent care FSAs historically allowed none. The law changed both rules for plan years ending in 2020 and 2021. Employers could amend their plans to let employees carry over all unused health FSA and dependent care FSA balances into the following year. Alternatively, employers could extend the grace period for spending down balances to a full 12 months after the end of the plan year. Employers had to pick one option for each account type. The IRS confirmed the rules in Notice 2021-15.
Educator Expense Deduction
Teachers and other eligible educators can already deduct up to $250 of classroom supplies they buy with their own money (now $300 for 2024 and later). The law clarified that personal protective equipment, disinfectant, and other supplies purchased to prevent the spread of COVID-19 count as qualified expenses.
Employer Student Loan Repayment
The CARES Act let employers contribute up to $5,250 per year toward an employee’s student loans without that amount counting as taxable income. The Consolidated Appropriations Act extended this treatment through December 31, 2025.
Payroll Tax Deferral Repayment
An executive order in 2020 let employers defer the employee share of Social Security payroll taxes on wages paid between September 1 and December 31, 2020. Employees originally had to repay the deferred amounts by April 30, 2021. The law pushed that deadline to December 31, 2021, giving workers more time to absorb the cost without interest or penalties.