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Consulting Services, Tax Services • Published 3/17/2021 American Rescue Plan Act: Overview


The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 11, 2021 and provides $1.9 trillion in federal funding in two key areas: addressing the COVID-19 virus and providing economic relief. In addition to funding for vaccines, testing, and healthcare needs, the ARPA is aimed at providing relief to educational institutions, state, tribal and local governments, businesses, and individuals. A few of the key funding areas are summarized below:

Addressing the COVID-19 virus

The ARPA provides more than $200 billion to directly address COVID-19, including $72 billion for vaccines and testing. The remaining funds assist the healthcare workforce, community health centers, and rural health providers along with other health resources and programs.

Relief for educational institutions

The ARPA provides $213 billion to assist educational institutions and providers including K-12 schools, higher education, child care, and Head Start. The ARPA also provides support for public education services in the arts, humanities, public broadcasting, and broadband for remote learning.

Related Article: Emergency Relief for Education & Child Care

Relief for state and local governments

The ARPA provides $365 billion for states, territories, and local and tribal governments to mitigate the fiscal effects of COVID-19. This includes programs to support economic development and critical infrastructure projects.

Related Article: Recovery Funds for State & Local Governments

Relief for businesses

The ARPA provides $38 billion to assist businesses in their recovery, including specific programs for restaurants, shuttered venue operators, and expanding PPP eligibility. Additionally, another $26 billion is reserved for small businesses to provide capital and targeted EIDL grants.

Also included in the ARPA: modifications to the Employee Retention Tax Credit (ERTC), expanded availability for emergency paid sick and family leave credits, and tax relief for pension plans.

Related Article: Updates to COVID-19 Tax Credits

Relief for housing needs

The ARPA provides $45 billion for a variety of housing programs, including emergency rental assistance, mortgage and utility assistance, and housing programs that provide fair housing and housing counseling, assisting people experiencing homelessness, and programs for rural housing needs.

Related Article: Emergency Rental Assistance Program

Relief for individuals

In addition to the aforementioned funding areas, the American Rescue Plan Act of 2021 provides significant relief to individuals through a variety of sources including direct payments, emergency temporary assistance, expanded nutritional assistance, enhanced unemployment benefits, and various credits and tax considerations.

Related Article: Significant Changes to Employee Benefits

Additional information

While this article highlights a few key provisions, there are many other aspects of the American Rescue Plan Act of 2021 that we will detail in upcoming articles. P&N’s dedicated professionals are committed to helping our clients understand and leverage the economic relief options available. Please contact us or connect with your P&N advisor to discuss your organization’s questions, concerns, and unique situation.

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