The American Rescue Plan (ARP), approved by Congress and signed into law this week, will provide $1.9 trillion to counteract economic declines related to the Coronavirus pandemic. The bill provides significant direct economic relief for Missourians including:
- Additional stimulus payments of $1,400 per person
- Tax credits for families with children and low-wage workers
- Extended unemployment benefits
- Lower health insurance premiums
- Food assistance
- Support for renters and homeowners
The American Rescue Plan provides a third round of stimulus payments of up to $1,400 per person.
- Individuals earning an adjusted gross income (AGI) up to $75,000 (and married couples earning up to $150,000) will receive $1,400 each, plus $1,400 for each dependent. An eligible family of four will receive $5,600.
- The amount is phased out for those with higher incomes.
About 90 percent of Missourians will receive stimulus payments totaling an estimated $7,573,000,000.
The estimated average payment for households receiving a stimulus check is $2,760.
Child Tax Credit (CTC)
The Child Tax Credit (CTC) helps families offset the costs of raising children. It currently applies to children under 17 years of age, and is only partially refundable.
- The American Rescue Plan temporarily expands the number of families eligible for the full CTC by making the credit fully refundable to children in families with low or no income.
- In addition, the amount of the credit is increased from $2,000 per child to $3,000 per child ($3,600 for children under age 6) and extends the CTC to 17 year olds.
- Changes to the CTC would apply to tax year 2021.
An estimated 1,262,000 Missouri kids would benefit from the expanded CTC, with 505,000 kids becoming newly eligible for the full credit.
The estimated average payment for households receiving the CTC is $2,850.
The CTC expansion will lift 73,000 Missouri kids out of poverty.
Earned Income Tax Credit (EITC)
Currently, the EITC is very limited for low wage earning workers who do not have dependent children at home. Only workers ages 25 to 65 qualify, and the maximum amount of the credit is just over $500.
- The American Rescue Plan temporarily expands the age range of eligible workers to include adults ages 19-24 (who aren’t fulltime students) as well as people 65 and over.
- In addition, the maximum EITC for these workers is increased from roughly $540 to $1500 and the income cap to qualify is increased from $16,000 to $21,000.
- Changes to the EITC would apply to tax year 2021.
An estimated 361,000 Missouri workers would benefit from the EITC expansion.
The estimated average credit for newly eligible households receiving the EITC is $750.
|Average Payment to Missouri Households Receiving Stimulus Check, Child Tax Credit (CTC), and Earned Income Tax Credit Provisions (EITC) of American Rescue Plan|
|Average Income||Income Group||Stimulus Payment||CTC||EITC|
The Act extends several critical federal unemployment insurance (UI) benefits (created in March by the CARES act) through September 6th. Additionally, for taxpayers with incomes below $150,000, the first $10,200 of UI benefits received in 2020 are exempt from taxation.
An estimated 89,529 Missouri workers would lose unemployment benefits this month without this extension.
|UI Provisions extended by the American Rescue Plan|
|Pandemic Unemployment Assistance (PUA)||Benefits for workers ineligible for traditional UI||Increased from 50 to 79 weeks|
|Pandemic Emergency Unemployment Compensation (PEUC)||Benefits for those who have exhausted state benefits||Increased from 24 to 53 weeks|
|Federal Pandemic Unemployment Compensation (FPUC)||Boosts weekly benefits by $300||n/a|
The law temporarily expands ACA Marketplace subsidies (also known as premium tax credits) for those insured through the marketplace in 2021 or 2022.
- Enrollees with incomes below 150% FPL would pay $0 for premiums through the marketplace, while enrollees between 150% FPL & 400% FPL would see premiums decline significantly.
- Families with incomes over 400% FPL would pay no more than 8.5% of their income toward premiums.
The average monthly premium in Missouri would decrease by $626.
Maximum Share of Household Income Required for Premium Tax Credits
|Income Range (FPL)||Current Law||ARP|
|200-250%||6.52%-8.33%||2.0% – 4.0%|
|250-300%||8.33%-9.83%||4.0% – 6.0%|
|300-400%||9.83%||6.0% – 8.5%|
The relief package extends a 15% increase in SNAP benefits through September 30th, 2021.
An estimated 697,000 Missourians will receive an average monthly benefit increase of $28 per person totaling an estimated $58 million during the three-month extension.
It also allows states to extend their Pandemic EBT programs through the summer to provide meals for children who usually receive breakfast and lunch at school.
Emergency Rental Assistance
The American Rescue Plan supplements current funding provided to states, localities, and territories to help families pay rent & utilities. Over 150,000 Missourians (or over half of adults who are not current on rent or mortgage payments) report that eviction or foreclosure in the next two months is either very or somewhat likely.
An estimated $322,771,300 million will be provided for rental assistance in Missouri.
Assistance for People Experiencing Homelessness
The law provides funding to help communities provide supportive services and safe, socially distant housing solutions, including the purchase of properties like motels for use as non-congregate shelter, to protect the health of families and individuals and help control transmission of coronavirus. Missouri will receive an estimated $46 million in assistance for people experiencing homelessness, with an additional $43 million in aid flowing directly to localities.
|CNSRT-St Louis County||$13,481,593|
The Act also provides a range of additional new and supplemental funding to help keep people in their homes including:
- Housing Counseling
- Emergency Housing Vouchers
- Rural Rental & Homeowner Assistance
- Mortgage and Utility Assistance
- Fair Housing Organizations