American Rescue Plan: How it may impact nonprofits and their clients

March 11, 2021

The House gave final approval to the $1.9 trillion coronavirus relief bill on March 10, 2021.  We highlight some of the major provisions in the bill and the effects they may have on reducing poverty rates in 2021 (source: Urban Institute, March 11, 2021, "2021 Poverty Projections: Assessing Four American Rescue Plan Policies.").

Here's a closer look at some of the big-ticket provisions in the Senate-amended bill (source: NPR, March 10, 2021, "Here's What's In The American Rescue Plan").  The National Council of Nonprofits also lays this out in a table format.

  • Direct payments

The bill allocates funds for a third economic impact payment to qualifying Americans.

Individuals earning up to $75,000 and couples earning up to $150,000 would receive the full direct payments of $1,400 per person. Individuals will also receive an additional $1,400 payment for each dependent claimed on their tax returns.

Senate Democrats agreed to lower the income cutoff at which payments phase out from $100,000 to $80,000 for individuals, and from $200,000 to $160,000 for couples filing jointly, following demands from moderate Democrats.

  • Unemployment benefits

Under the Senate version, federal unemployment insurance payments will remain at $300 per week — down from $400 per week in the earlier package passed by the House. The benefits will extend through Sept. 6. The Senate's bill makes the first $10,200 in unemployment payments nontaxable for households with incomes under $150,000.

  • Child tax credit

The legislation would temporarily expand the child tax credit, increasing the amount to $3,000 for children ages 6 to 17 and $3,600 for children under age 6.

The amount is gradually reduced for couples earning over $150,000 and individuals earning over $75,000 per year. Families eligible for the full credit would get payments of up to $300 per child per month from July through the end of the year.

Congressional Democrats and the White House may want to figure out how to make the credit permanent.

  • Paycheck Protection Program

The bill includes $7.25 billion in new money for the small-business loan program known as PPP and would allow more nonprofits to apply, including those groups that engage in advocacy and some limited lobbying. It also allows larger nonprofits to be eligible.

  • Education

There are over $128 billion in grants to state educational agencies, with 90% allocated to local educational agencies, plus $39 billion in grants to higher education institutions. Nearly $15 billion in funds are directed to the Child Care & Development Block Grant program to help support child care facilities, particularly in high-need areas.

The Senate version added a provision to make any student loan forgiveness passed between Dec. 31, 2020, and Jan. 1, 2026, tax-free — rather than having the forgiven debt be treated as taxable income.

  • Support for low-income families

The bill includes $4.5 billion for the Low Income Home Energy Assistance Program, known as LIHEAP, to help families with home heating and cooling costs. One provision would give the agriculture secretary the authority and funding to temporarily boost the value of cash vouchers for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) up to $35 per month for women and children for a four-month period during the pandemic.

There is $1.4 billion in funding for programs authorized under the Older Americans Act, including support for nutrition programs, community-based support programs and the National Family Caregiver Support Program.

The bill provides $37 million to the Commodity Supplemental Food Program for low-income seniors.

  • Public health

The Centers for Disease Control and Prevention is set to receive $7.5 billion to track, administer and distribute COVID-19 vaccines. Another $46 billion would go toward diagnosing and tracing coronavirus infections, and $2 billion would go toward buying and distributing various testing supplies and personal protective equipment.

  • Industry support

There's a variety of provisions in the legislation to offer support to different industries. The Small Business Administration would get $25 billion for a new grant program for "restaurants and other food and drinking establishments." Grants would be up to $10 million per entity and $5 million per physical location, with a maximum of 20 locations. The legislation sets aside $5 billion of the total money to be targeted to businesses with less than $500,000 in revenue in 2019. The bill includes another $1.25 billion for the Small Business Administration's Shuttered Venue Operators Grant program.

To support the transportation sector, the bill allocates nearly $30 billion for transit costs, including payroll and personal protective equipment; $8 billion for airports; $3 billion for a temporary payroll support program to help support the aerospace manufacturing industry; and $1.5 billion to recall and pay Amtrak employees who were furloughed because of the pandemic and to restore various daily routes. Another $15 billion would also be allocated to support workers in the airline industry.

  • Rental assistance

There is $25 billion for emergency rental assistance, including $5 billion for emergency housing vouchers for people experiencing homelessness, survivors of domestic violence and victims of human trafficking.