Updated for filing 2021 tax returns
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.
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 could 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 was far-reaching and included a section of provisions for pandemic-related needs.
What is the American Rescue Plan?
The American Rescue Plan Act (ARPA) included financial aid and relief for COVID-19, plus additional funding for manufacturing and distribution of vaccines.
ARPA included the EIP3 stimulus payment of $1,400 per individual, including dependents, though limits and phaseouts were applied for higher-income taxpayers. Any missing amounts can be claimed when taxpayers file in 2022 via the Recovery Rebate Credit.
ARPA also included an increased Child Tax Credit, half of which was distributed on a monthly basis to provide more immediate support (the other half and any other missing amounts can be claimed when taxpayers file in 2022).
Also, the first $10,200 of unemployment benefits were tax-free in 2020.