What is the CARES Act?
In March of 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (officially referred to as H. R. 748) was passed.
The CARES Act stimulus package was designed to provide relief and stimulate the U.S. economy as part of the national emergency relief operations during the COVID-19 pandemic.
Most aspects of the CARES Act have already been applied—the first stimulus payment (also known as an Economic Impact Payment or EIP) came from the CARES Act, and it kicked off other forms of relief for student loans, unemployment and housing.
The maximum EIP1 stimulus payment per person was $1,200 for the CARES Act payment and $500 for any child dependents. Limits and phaseouts applied for higher-income taxpayers, and any missing amount that you qualify for can be claimed via the Recovery Rebate Credit.
What is the Consolidated Appropriations Act?
The second round of stimulus payments came in the Consolidated Appropriations Act, which was passed in early January 2021. Instead of being expressly for COVID-19 relief, the Consolidated Appropriations Act is far-reaching and includes a section of provisions for pandemic-related needs.
What is the American Rescue Plan?
The American Rescue Plan Act (ARPA) includes financial aid and relief for COVID-19, plus additional funding for manufacturing and distribution of vaccines.
ARPA also includes an increased Child Tax Credit that will be distributed to those qualifying for the full credit on a monthly (rather than annual) basis to provide more immediate support. Also, the first $10,200 of unemployment benefits are now tax-free.