Key Ways The $1.9 Trillion COVID-Relief Bill Will Affect You

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Tyler Bowen
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Key Ways The $1.9 Trillion COVID-Relief Bill Will Affect You

Simply put—COVID-19 changed everything. From economics to healthcare to interpersonal relationships, the virus has shaped the way we’ve all experienced the world over the past year.

Since March 2020, there have been two significant stimulus packages—the $2.2 trillion CARES Act and the $900 billion Consolidated Appropriations Act. Now, there is another package, the American Rescue Plan.

The long-awaited relief bill has finally passed by a 220-211 vote. The historic $1.9 trillion coronavirus relief package was signed into law by President Joe Biden on Friday, March 12.

What support does this bill provide? Here are the major components.

Top Provisions of the American Rescue Plan

This package was designed to support individuals, families, businesses, and the economy at large, which has sustained negative impacts due to COVID-19. Let’s take a look at the main benefits coming your way.

Direct payments

Eligible households will receive the biggest stimulus check yet, $1,400 per person plus an extra $1,400 for qualified dependents.

Phaseouts are much stricter this time around, beginning at $75,000 if filing single and $150,000 if married filing jointly. Those making over $80,000 and $160,000 respectively are ineligible for direct payments. The government will use your latest tax return to determine household income.

Boost for unemployment benefits

Until September 6, 2021, unemployment benefits can see an increase of $300 per week. The first $10,200 in benefits will also be tax-free (for families making less than $150,000).

Unemployment programs that protect self-employed people and independent contractors (Pandemic Unemployment Assistance) have also been extended to September 6.

The plan also offers a 100% subsidy for COBRA health insurance premiums, allowing unemployed people to remain on their plans through September.

Substantial child tax credit

Americans will see a 12-month extension on a larger child tax credit—$3,600 for children under 6 and $3,000 for kids 6 to 17.

There are several ways this credit could impact families. It allows 17-year-old children to qualify, removes the earnings stipulation, and is fully refundable. The best part? Half the credit can be paid to families in advance. There are, of course, income thresholds to be cognizant of—$200,000 for single filers and $400,000 married filing jointly are ineligible.

Paycheck Protection Program

This bill attempts to shore up the PPP by providing $7.25 billion in available funds.

A break for education (but not student loans)

School closures have put a significant strain on students, parents, teachers, and administrators. The plan allocates about $130 billion to K-12 schools. The funds will help schools reopen safely by reducing class sizes, purchase proper personal protective equipment, improve ventilation, among other improvements.

Deeply connected to K-12 closures is the lack of accessible and affordable childcare. The plan infuses $40 billion to childcare providers.

$40 billion is reserved for higher education to provide emergency financial aid to students.

Biden’s much-discussed student loan forgiveness plan was not included in this package. However, should any forgiveness law be passed before January 1, 2026, the forgiven balance will be tax-free. Under normal circumstances, loan forgiveness is considered taxable income—a law afflicting many borrowers.

Additional funds for vaccine manufacturing and distribution

Covid-19 vaccine manufacturing gets about a $20 billion windfall and about $50 billion will be funneled into testing and contact tracing.

How will the bill impact you?

The American Rescue Plan will impact families in different ways.

Direct payments present many opportunities for individuals and families across the country. If you don’t have to use the funds to supplement daily living expenses, consider the following:

  • Shore up your emergency fund (3-6 months of living expenses)
  • Put more towards your retirement (401k, IRA, etc.)
  • Pay off debt (concentrate on high-interest first)
  • Add to your brokerage account
  • Fund short-term goals

It’s important to take advantage of every financial opportunity available to you, especially in light of the trials and tribulations over the past year.

As your trusted financial advisor, we are here to support you through all of life’s transitions. Let’s make the most of this aid package together. Schedule a call to learn more about how to take advantage of tax credits, grants, and loan opportunities available to you.

First Dakota Wealth & Trust is the fiduciary investment department of First Dakota National Bank with trustee powers to serve clients during their lifetime, during incapacity, and after death. We help clients develop a financial roadmap to help simplify their financial future.


Please note that neither First Dakota National Bank nor First Dakota Wealth & Trust Department, or its employees provides tax or legal advice. This is intended for informational purposes and is not intended to constitute legal or tax advice. Please consult your attorney and/or tax professional for advice related to your specific situation.