Number:        117-2   
Date:             March 12, 2021

President Signs H.R. 1319, the
"American Rescue Plan Act of 2021"

On March 11, 2021, the President signed H.R. 1319, the American Rescue Plan Act of 2021, into law.  The new law provides funding for COVID-19 testing and vaccine production and distribution, as well as additional economic relief for individuals, communities and businesses.

Below is a summary of provisions of interest to the Social Security Administration (SSA):

Section 9601- Recovery Rebates for Individuals

  • Treasury will provide additional “recovery rebates” (also called “economic impact payments” or EIPs), which were first authorized under the CARES Act, and again under the Consolidated Appropriations Act, 2021.  SSA will not be directly involved in issuing these payments. 
  • The EIP will be a one-time payment of $1,400 for individual tax filers, or $2,800 for joint filers, plus an additional $1,400 for each dependent, which includes both dependent children and relatives who are dependent for tax purposes.  In prior EIPs, the additional amounts were based on the number of dependent children only.
  • The amount of the recovery rebate is reduced if the person’s adjusted gross income (AGI) exceeds certain limits ($75,000 for individuals, $150,000 for joint filers, and $112,500 for head of household).  People cannot receive an EIP if their AGI equals or exceeds certain limits ($80,000 for individuals, $160,000 for joint filers, and $120,000 for head of household).  It is also reduced by the amount of certain advanced tax credits the person received.
  • To be eligible, a person needs to have a Social Security number (SSN) and not be a non-resident alien or claimed as a dependent on someone else’s tax return.  A dependent must also have an SSN for the taxpayer to receive the additional amount for the dependent.
  • Treasury will issue the recovery rebate using the address or electronic payment information from the person’s tax return for 2020 or 2019.  For people who did not file for those years, Treasury will use other information it has available to it to make the EIP, which could include information on Old Age, Survivor, and Disability Insurance and Supplemental Security Income beneficiaries previously provided by SSA.  Treasury is also required to use rules for paying people who did not file a return similar to the rules they used for prior EIPs, which involved issuing the EIP to beneficiaries’ representative payees.
  • Treasury is required to issue the payments as quickly as possible after enactment.

Sections 9611-9626 – Child Tax Credit and Earned Income Tax Credits

  • These sections generally expand eligibility for and the amount of the Child Tax Credit (CTC) and Earned Income Tax Credits (EITC).
  • For 2021, the CTC will increase from $2,000 per qualifying child to $3,000 (or $3,600 for children under six).  In addition, the Treasury would, in general, make periodic payments to taxpayers throughout the year, in equal amounts, that in total equal the annual credit amount.   
  • The changes do not affect the statutory exclusion of the CTC and EITC for SSI purposes.  Both remain excluded from income when received and from resources, if retained, for 12 months.

Sections Section 9632 – Increase in Exclusion for Employer-Provided Dependent Care Assistance

  • This section increases the dollar limit for dependent care flexible spending account contributions in calendar year 2021 from $5,000 to $10,500 for married couples filing joint tax returns and from $2,500 to $5,250 for single filers.

Sections 9011-9018 – Extension of Pandemic Unemployment Assistance

  • These sections extend pandemic-related federal unemployment benefits for an additional 25 weeks through September 6, 2021, maintaining the federal add-on at $300 a week, while also extending from 50 weeks to 75 weeks the time that individuals may receive unemployment benefits.

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Other provisions of the new law include the following:

Section 4001 – Emergency Federal Employee Leave Fund 

  • This section establishes the Emergency Federal Leave Fund (Fund) in the Department of Treasury administered by the Office of Personnel Management.  The Fund makes available $570 million for reimbursement through September 30 to an agency for the use of paid leave by an employee who is unable to work because the employee:
    • is subject to quarantine orders related to COVID-19, has been advised to self-quarantine, or has COVID-19 symptoms; or
    • is receiving a vaccination for COVID-19; or
    • is caring for a child or family member under certain conditions related to COVID-19.
  • Would require paid leave under this provision not to exceed 600 hours for a full-time employee or a proportional equivalent for a part-time employee.

Section 4009—Cybersecurity and Infrastructure Security Agency

  • This section appropriates for fiscal year 2021, out of any money in the Treasury not otherwise appropriated, $650,000,000 to the Cybersecurity and Infrastructure Security Agency for cybersecurity risk mitigation. Such funds shall remain available until September 30, 2023, and are in addition to amounts otherwise made available.

Section 4011—Appropriation for the Technology Modernization Fund

  • This section appropriates for fiscal year 2021, out of any money in the Treasury not otherwise appropriated, $1,000,000,000 to the General Services Administration to carry out the purposes of the Technology Modernization Fund. Such funds shall remain available until September 30, 2025.

Section 4016 – Eligibility for Workers’ Compensation Benefits for Federal Employees Diagnosed with Covid-19 

This section provides presumptive eligibility for Federal Employees Compensation Act (FECA) benefits to a federal employee injured by exposure to COVID-19 from January 27, 2020 through January 27, 2023.  Employees who are exclusively teleworking during this period would not be presumed eligible.