$1.9 Trillion American Rescue Plan Act Continues the Pattern of Stimulating the Economy Through Tax Policy
Sub-topics of this lengthy article are published on adjoining pages.
By Don Carpenter and Tim Thomasson
President Joe Biden signed the American Rescue Plan Act of 2021 (ARPA) into law on March 11, 2021. Positioned as a necessary financial relief package to aid families disadvantaged by the economic fallout of the pandemic, several major provisions distribute the benefits through changes in tax policy and administration.
This is consistent with the earlier relief contained in the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and the Consolidated Appropriations Act of 2021. And although some of the provisions are similar to provisions in these earlier acts, there are modifications that are worth noting.
- Recovery Rebates
- Unemployment Benefits
- Child Tax Credit
- Child and Dependent Care Credit
- Earned Income Tax Credit (EITC)
- Assistance for Health Care
- Student Loans
- Employment Credits Extended
- Several Miscellaneous Business Provisions Also Included
When combined with the CARES Act of 2020 and the Consolidated Appropriations Act of 2021, the American Rescue Plan continues the trend of providing economic relief to a broad section of the population through both direct payments and modification to tax credits.
About the Authors:
Don Carpenter, MSAcc/CPA, is clinical professor of accounting in the Hankamer School of Business at Baylor University. Contact him at Don_Carpenter@baylor.edu.
Timothy S. Thomasson, CPA, MTAX, is Graduate Program Director and an associate clinical professor in the Hankamer School of Business at Baylor University. He is also a practicing CPA. Thomasson can be reached at Timothy_Thomasson@baylor.edu.