Section Title

Description

CRS Resources

Subtitle G—Promoting Economic Security

Part 1—2021 Recovery Rebates to Individuals

Recovery Rebates to Individuals

Enacts a third round of direct payments for individuals and households ("stimulus checks"). These payments are structured as refundable tax credits against 2021 income taxes, but are issued (and hence received) in 2021, as opposed to 2022 (when 2021 income tax returns will be filed). Amount and eligibility for the advanced credit is generally based on information from 2020 income tax returns (or 2019 returns, if 2020 returns have not been filed when the advanced credit is initially issued). For households whose payment was based on 2019 income data, and who would be eligible to receive a larger payment based on 2020 data, the IRS is directed to issue a supplementary payment (a "top up") within 90 days of the tax filing deadline or September 1, 2021, whichever date is earlier.

Payments are generally issued per household and equal the sum of $1,400 per eligible individual ($2,800 for married joint filers) and $1,400 for each eligible dependent (including older children and adult dependents). For each individual who died before January 1, 2021, the payment amount is reduced from $1,400 to $0.

The payment phases out ratably (i.e., proportionally) between $75,000 and $80,000 for single filers, $112,500 and $120,000 for head of household filers, and $150,000 and $160,000 for married joint filers. The larger the total credit amount, the faster the payment phases out using this method.

Eligible individuals and dependents generally need to have a social security number (SSN) to receive the payment. (Adoption taxpayer ID numbers are also valid for dependents.) The maximum payment amount ($1,400) is reduced to $0 for each otherwise eligible individual or qualifying dependent who does not have an SSN (i.e., they have an individual taxpayer identification number, or ITIN, instead). This provision does not apply to married members of the Armed Forces if at least one spouse has an SSN. In such cases, they are eligible for up to $2,800. If no eligible individual has an SSN (i.e., an unmarried taxpayer does not have an SSN or neither spouse of a married joint filing couple has an SSN), they are still eligible to receive a payment for a qualifying dependent with an SSN.

The advanced payment of the credit is generally exempt from offset by Treasury prior to when the payment is issued for certain past-due debts owed by the recipient (including past-due child support). However, the amount the taxpayer claims as a credit on their 2021 tax returns will generally be subject to offset. The law does not include protections for garnishment or levy (debt collection actions that occur after the payments are received by households).

For eligible individuals who did not file a 2020 or 2019 income tax return, the IRS is given broad authority to make payments based on information available to the Treasury, in a similar manner as was done with the second round of payments enacted under P.L. 116-260.

Treasury is directed to make payments to the U.S. territories (mirror code and non-mirror code) equal to the aggregate amount issued to their residents as a result of this provision. (Many territorial residents will receive this benefit under a version of the provision administered via the territorial government, rather than the IRS.)

These payments are not taxable. In addition, like other tax credits, these payments do not count as income or resources for a 12-month period in determining eligibility for, or the amount of assistance provided by, any federally funded public benefit program.

If a taxpayer receives a larger advanced credit in 2021 than they are eligible for on their 2021 income tax return, they generally are not required to pay it back. If an individual receives an advanced payment less than what they are eligible for on their 2021 income tax return, they can claim the difference on their return (filed in 2022).

For more information, see

• CRS Insight IN11604, COVID-19 and Direct Payments: Frequently Asked Questions (FAQs) About the Third Round of "Stimulus Checks" in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.
• CRS Insight IN11605, COVID-19 and Direct Payments: Comparison of First and Second Round of "Stimulus Checks" to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick
• CRS Insight IN11624, COVID-19 and Direct Payments: How Do the "Stimulus Check" Phaseouts Differ Between the House-Passed and Senate-Passed American Rescue Plan?, by Margot L. Crandall-Hollick.
• CRS Insight IN11628, Estimated "Direct Payments" by State Under the House and Senate Versions of the American Rescue Plan Act of 2021 (H.R. 1319), by Conor F. Boyle and Jameson A. Carter.

For background, see

• CRS Report R46415, CARES Act (P.L. 116-136) Direct Payments: Resources and Experts, coordinated by Margot L. Crandall-Hollick.
• CRS Insight IN11576, COVID-19 and Direct Payments to Individuals: Comparison of the Second Round of "Stimulus Checks" in P.L. 116-260 to the First Round in the CARES Act (P.L. 116-136), by Margot L. Crandall-Hollick.
• CRS Insight IN11575, COVID-19 and Direct Payments to Individuals: Frequently Asked Questions (FAQs) About the Second Round of "Stimulus Checks" in P.L. 116-260, by Margot L. Crandall-Hollick.
• CRS Insight IN11580, COVID-19 and Direct Payments: Summary of the CASH Act (H.R. 9051, 116th Congress) Modifications to "Stimulus Checks," by Margot L. Crandall-Hollick.

Part 2—Child Tax Credit

Child Tax Credit Improvements for 2021

For 2021, temporarily increases the amount of the child tax credit for low- and moderate-income taxpayers to up to $3,600 per child for a young child and up to $3,000 for older children by modifying several provisions of the existing credit. First, the law eliminates the earned-income-based phase-in of the refundable portion of the child credit (often referred to as the "additional child credit" or ACTC) and eliminates the maximum amount of the ACTC ($1,400). Hence, the child credit is "fully refundable" and available to otherwise eligible taxpayers with no earned income. Second, the law increases the maximum age for an eligible child to 17. Third, the law increases the maximum amount of the credit from $2,000 per child to $3,600 per child for a young child (0-5 years old) and $3,000 per child for an older child (6-17 years old). This increase in the maximum child credit of $1,600 per child for young children and $1,000 per child for older children gradually phases out at a rate of 5% as income exceeds specified thresholds until the credit amount equals the pre-ARPA maximum of $2,000 per child. These thresholds are $75,000 for single filers, $112,500 for head of household filers, and $150,000 for married joint filers. (The actual income level at which the credit phases down to $2,000 per child will depend on the number and age of qualifying children.) For most families, the credit then remains at its pre-ARPA level and phases out when income exceeds the pre-ARPA thresholds of $200,000 ($400,000 for married joint filers).^a

Directs the Treasury to issue half of the expected 2021 credit in periodic payments beginning after July 1, 2021. These periodic payments are generally of equal size. The remaining half of the total 2021 credit will be claimed on a 2021 income tax return filed in early 2022. The amount of the payments advanced in 2021 is estimated based on 2020 income tax data, or if unavailable, 2019 income tax data. The advanced child credit payments will reduce the child credit received with a 2021 return. In cases where a taxpayer receives more in advanced payments than they are eligible for (whether due to changes in income, changes in filing status, or changes in the number of eligible children who live with the taxpayer between 2021 and the year that provides data on which the advanced credit is based [2020 or 2019]), taxpayers will generally need to repay total aggregate advanced payments. In cases where a taxpayer receives excess advanced payments due to net changes in the number of qualifying children between 2020 (or 2019) and 2021, repayment obligations will be reduced for low- and moderate-income taxpayers. Specifically, taxpayers with income below $40,000 for single filers, $50,000 for head of household filers, and $60,000 for joint filers in 2021 will not need to repay up to $2,000 per qualifying child in advanced credit overpayments (the $2,000 amount is referred to as the "safe harbor amount"). Taxpayers with income above these thresholds but below $80,000 for single filers, $100,000 for head of household filers, and $120,000 for married joint filers will gradually have the safe harbor amount reduced to $0 per qualifying child. Hence, taxpayers with income over $80,000 for single filers, $100,000 for head of household filers, and $120,000 for married joint filers in 2021 will need to repay the entire amount of the overpayment.

The law creates an online portal to allow taxpayers the options to either opt out of receiving advanced payments or provide information regarding changes in income, marital status, and number of qualifying children in order to modify the advanced credit amounts.

Advanced payments will not be subject to offset prior to when the payment is issued for certain past-due debts owed by the recipient. However, the amount the taxpayer claims as a credit on their 2021 tax returns would generally be subject to offset. The law does not include protection for garnishment and levy, debt collection actions that tend to occur after a payment is received (i.e., deposited in a bank account).

The law allows the Treasury to adjust income tax withholding to accommodate these advance payments.

Advanced payments are generally not available to eligible residents of U.S. territories.

For more information, see

• CRS Insight IN11613, The Child Tax Credit: Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R41873, The Child Tax Credit: How It Works and Who Receives It, by Margot L. Crandall-Hollick.
• CRS Report R46502, The Child Tax Credit: Selected Legislative Proposals in the 116th Congress, by Margot L. Crandall-Hollick.

Application of the Child Tax Credit in Possessions

Effectively expands child credit eligibility to residents of U.S. territories permanently. For "mirror code" territories, the Treasury will make payments equal to the territory's costs of the child tax credit. For American Samoa (a non-mirror code territory), the Treasury will make payments equal to the territory's costs of the child tax credit as if it were a mirror code territory. In contrast, eligible residents of Puerto Rico (also a non-mirror code territory) will file for the credit directly with the IRS.

For background, see

• CRS Report R44651, Tax Policy and U.S. Territories: Overview and Issues for Congress, by Sean Lowry.

Part 3—Earned Income Tax Credit

Strengthening the Earned Income Tax Credit for Individuals with no Qualifying Children

For 2021, temporarily expands both eligibility for and the amount of the earned income tax credit (EITC) for taxpayers without qualifying children by modifying the eligibility age and credit formula.

Regarding eligibility age, expands eligibility for the EITC for individuals with no qualifying children—sometimes referred to as the "childless" EITC—by reducing the minimum eligibility age from 25 to 19 for most workers. In other words, this change allows most eligible workers ages 19 to 24 to claim the childless EITC. For students who are attending school at least part-time, the age limit is temporarily reduced from 25 to 24.^b For former foster children and youth who are homeless, the minimum age is temporarily reduced from 25 to 18. The law also temporarily eliminates the upper age limit, so workers aged 65 and older are eligible.

Regarding the credit amount, temporarily increases the childless EITC by increasing the earned income amount (the minimum income necessary to receive the maximum credit amount) and phaseout threshold amount (the maximum income level at which taxpayers receive the maximum credit amount before it begins to phase out) to $9,820 and $11,610, respectively, while also doubling the phase-in and phaseout rates from 7.65% to 15.3%. The maximum childless EITC increases from $543 to $1,502 in 2021.

For more information, see

• CRS Insight IN11610, The "Childless" EITC: Temporary Expansion for 2021 under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R43805, The Earned Income Tax Credit (EITC): How It Works and Who Receives It, by Margot L. Crandall-Hollick, Gene Falk, and Conor F. Boyle.

Taxpayer Eligible for Childless Earned Income Credit in Case of Qualifying Children Who Fail to Meet Certain Identification Requirements

Permanently allows taxpayers who currently cannot claim the childless EITC because all of their qualifying children do not have SSNs to be eligible to claim the childless EITC.

Credit Allowed in Case of Certain Separated Spouses

Permanently allows married taxpayers who file their tax returns as married filing separately to claim the EITC if they live with a child for whom they can claim the EITC for more than half the year and either (1) do not have the same principal place of abode as their spouse for the last six months of the year, or (2) have a decree, instrument, or agreement (i.e., other than a divorce decree) and do not live with their spouse at the end of the year.

Modification of Disqualified Investment Income Test

Permanently modifies the disqualified investment income test. Prior to ARPA, taxpayers with investment income over a certain threshold—$3,650 in 2020 and 2021—were ineligible for the EITC. Disqualified investment income is defined as interest income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive income. It also includes royalties from sources other than the filer's ordinary business activities. This provision permanently raises this amount to $10,000 and annually adjusts it for inflation beginning in 2022.

Application of Earned Income Tax Credit in Possession of the United States

Permanently provides authority to make payments to Puerto Rico, American Samoa, and mirror-code territories for amounts they pay out in the EITC. For Puerto Rico and American Samoa, such payments are contingent upon those territories increasing the amount of their EITC or enacting an EITC, respectively.

Temporary Special Rule for Determining Earned Income for Purposes of Earned Income Tax Credit

For the purposes of calculating their EITC on their 2021 income tax return, allows taxpayers to substitute their 2019 earned income for their 2021 earned income if their earned income at the end of 2021 is less than their 2019 earned income.

Part 4—Dependent Care Assistance

Refundability and Enhancement of Child and Dependent Care Tax Credit

For 2021, temporarily expands the child and dependent care credit by making the credit refundable and making it larger for most workers. The CDCTC credit amount is a product of the amount of qualifying expenses (which is subject to a cap) and the credit rate. The law increases the cap on qualifying expenses from $3,000 for one child and $6,000 for two or more children to $8,000 and $16,000, respectively. The law also increases the credit rate for workers with $183,000 or less of income (the credit rate remains the same as under current law for those with income over $183,000 up to $400,000 [i.e., 20%], and is reduced from current law for those with over $400,000 of income). Specifically, for those with less than $125,000 of income, the credit rate increases to 50% (from 35%) of expenses. This 50% credit rate gradually phases down to 20% until taxpayers have $183,000 of income. For those with more than $183,000 of income up to $400,000, the credit rate then remains at 20%, gradually falling to zero when income exceeds $438,000. As a result, those with income over $438,000 are not eligible for the credit.

By making the credit refundable, the law effectively expands eligibility to many lower-income taxpayers. Prior to ARPA, the CDCTC was a nonrefundable credit, meaning the value of the credit could not exceed a taxpayer's income tax liability. As a result, those with little or no income tax liability, including many low-income taxpayers, received little or no benefit from the credit. (Note that the existing-law earned income limitation, which caps qualifying expenses at a taxpayer's earned income [or the earned income of the lower-earning spouse], is unchanged by ARPA.)

In combination, the ARPA changes will increase the maximum amount of the CDCTC from $2,100 to $8,000, depending on expenses and income.

The law allows the Treasury to make payments to Puerto Rico, American Samoa, and mirror-code territories for the cost of providing the refundable CDCTC in 2021 to their territorial residents. (Non-mirror code territories [i.e., Puerto Rico and American Samoa] will need to develop a plan, approved by the Treasury Secretary, to distribute the amounts of the refundable CDCTC to their residents.)

For more information, see

• CRS Insight IN11645, The Child and Dependent Care Tax Credit (CDCTC): Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them, by Margot L. Crandall-Hollick.

Increase in Exclusion for Employer-Provided Dependent Care Assistance

For 2021, temporarily increases the maximum amount of qualifying child care expenses that eligible taxpayers can exclude from their income from $5,000 to $10,500.

Part 5—Credits for Paid Sick and Family Leave

Payroll Credits

Extends the Families First Coronavirus Response Act (FFCRA; P.L. 116-127) employer payroll tax credits for paid sick and paid family leave from March 31, 2021, through September 30, 2021.

Prior to ARPA, FFCRA paid sick leave was limited to 10 days per employee. This provision resets the 10-day limit, starting April 1, 2021, for employers claiming the credit for paid sick leave provided to their employees.

Expands the paid sick and paid family leave credits to allow credits for leave taken to obtain immunization related to COVID-19 or recover from any injury, disability, illness, or condition related to COVID-19 immunization.

Expands the definition of qualifying paid family leave to allow family leave payroll tax credits to be claimed for all qualifying uses of paid sick time, including for leave provided if the employee is subject to a quarantine or isolation order due to COVID-19 or is caring for someone in a similar situation.

Prior to ARPA, the tax credit for family leave wages was limited to $200 per day, and $10,000 total per employee. This provision increases this limit on the tax credit for paid family leave wages, allowing the credit on up to $12,000 in paid family leave wages.

Adds a nondiscrimination rule to the paid leave payroll tax credits, providing employers cannot claim the credits if paid leave provided to employees discriminates in favor of highly compensated employees or full-time employees, or discriminates on the basis of employment tenure with the employer.

Prior to ARPA, the paid sick and paid family leave tax credits were claimed against the Old-Age, Survivors and Disability Insurance (OASDI) tax, or the equivalent amount of the Railroad Retirement Tax Act (RRTA) tax. This provision restructures the paid sick and family leave payroll tax credits to be claimed against the employer's share of the hospital insurance (HI) payroll tax, after March 31, 2021. The employer's share is 1.45% of wages paid to employees. This credit will not affect amounts transferred to the Federal Hospital Insurance Trust Fund.

Prior to ARPA, government employers, including state and local government employers, were not allowed to claim paid leave payroll tax credits. This provision provides that 501(c)(1) organizations and 501(a) organizations can claim the tax credits, making certain state and local governments, as well as 501(c)(1) federal government instrumentalities, tax-credit eligible.

The provision provides that paid sick and paid family leave payroll tax credits can be increased by the employer's share of OASDI and HI payroll taxes (and equivalent RRTA tax) for the paid leave wages. Denial of double benefit applies, and gross income of the employer is increased by the amount of the credit provided by this section.

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock.

Credit for Sick Leave for Certain Self-Employed Individuals

Under FFCRA, self-employed individuals are allowed a refundable income tax credit for paid sick leave. This provision extends and expands the paid sick leave tax credits for self-employed individuals, similar to the modifications made for employers (described above).

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock.

Credit for Family Leave for Certain Self-Employed Individuals

Under FFCRA, self-employed individuals are allowed a refundable income tax credit for paid family leave. This provision extends and expands the paid family leave tax credits for self-employed individuals, similar to the modifications made for employers (described above). Tax credits can be claimed for up to 60 days of family leave for self-employed individuals.

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock.

Part 6—Employee Retention Credit

Extension of Employee Retention Credit

The employee retention and rehiring tax credit is 70% of qualified wages. The refundable payroll credit can be computed on up to $10,000 in qualified wages paid to an eligible employee per calendar quarter. Prior to ARPA, the credit was available through June 30, 2021. Thus, the maximum credit amount for 2021 was $14,000 (70% of up to $20,000 in qualified wages paid over the first two quarters).

Qualified wages depend on the number of employees the employer had in 2019. For employers with more than 500 full-time employees, qualified wages are wages paid when employee services are not provided. For employers with 500 or fewer full-time employees, all wages paid by eligible employers are credit-eligible.

This provision extends the employee retention credit through December 31, 2021. With this extension, the maximum credit amount for 2021 is $28,000. A credit of up to $50,000 per calendar quarter is also provided to recovery startup businesses, defined as businesses established after February 15, 2020, with average annual gross receipts that do not exceed $1 million. Severely financially distressed employers, those with gross receipts that are less than 10% of what they were in the same calendar quarter in 2019, are able to treat all wages as qualified wages.

The credit is restructured to be claimed against the employer's share of the hospital insurance (HI) payroll tax (as opposed to the OSADI and equivalent amount of RRTA tax).

For background, see

• CRS In Focus IF11721, The Employee Retention and Employee Retention and Rehiring Tax Credits, by Molly F. Sherlock.

Part 7—Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers

For 2021 and 2022, temporarily expands eligibility for and the amount of the premium tax credit (PTC) by modifying the income eligibility criteria and credit formula.

Regarding income, temporarily expands eligibility by eliminating the current-law phaseout for households with annual incomes above 400% of the federal poverty level (FPL).

Regarding the formula, temporarily increases the credit amount by reducing the percentage of annual income that eligible households are required to contribute toward the premium. The temporary percentages range from 0.0% to 8.5% of household income, with higher-income groups subject to the larger percentages, as specified.

For background, see

• CRS Report R44425, Health Insurance Premium Tax Credits and Cost-Sharing Subsidies, by Bernadette Fernandez.

Temporary Modification of Limitations on Reconciliation of Tax Credits for Coverage Under a Qualified Health Plan with Advance Payments of Such Credit

For 2020, temporarily provides tax relief to individuals who are subject to the current-law requirement to pay back PTC amounts that were provided in excess. Temporarily suspends the recapture of excess credit amounts under the current tax reconciliation process.

Application of Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021

For 2021, temporarily expands eligibility for and the amount of the PTC for certain individuals who receive unemployment compensation (UC). Temporarily deems individuals who receive UC for any week in calendar year 2021 to have met the PTC income eligibility criteria. Temporarily disregards any household income above 133% FPL.

For background, see

• CRS Report R45478, Unemployment Insurance: Legislative Issues in the 116th Congress, by Julie M. Whittaker and Katelin P. Isaacs.

Part 8—Miscellaneous Provisions

Repeal of Election to Allocation Interest, Etc. on Worldwide Basis

U.S. firms are eligible for foreign tax credits up to the amount of U.S. tax paid on foreign-source income. To impose this limit, U.S. and foreign-source income must be determined. Certain deductions are allocated between U.S. and foreign sources, including interest. Until 2021, firms allocated interest excluding that paid by foreign firms (called "waters edge" allocation). Prior to ARPA, beginning in 2021, firms would have been able to elect to include interest paid by related foreign firms. This treatment is called worldwide allocation. It would have been beneficial for some firms because some of the interest paid for foreign firms would be allocated to U.S. sources, increasing foreign-source income, increasing the limit on the foreign tax credit and, thus, increasing foreign tax credits that reduce tax liability. A provision was adopted in 2004 to move to worldwide allocation, but it was delayed by other legislation and was scheduled to begin in 2021.

This provision repeals the election to move to worldwide allocation.

For background, see

• CRS Report RL34494, The Foreign Tax Credit's Interest Allocation Rules, by Jane G. Gravelle and Donald J. Marples.

Tax Treatment of Targeted Economic Injury Disaster Loan Advances

Under normal tax rules, a forgiven debt is generally treated as taxable income to the borrower. Prior legislation has allowed forgiven loans for certain programs (such as those provided by the Paycheck Protection Program, or PPP, and certain other small business loans) to be excluded from income. Following an IRS ruling that associated expenses would not be deductible, legislation specified that associated expenses would be deductible. This provision extends this treatment (exclusion from income and deduction of expenses) to additional Economic Injury Disaster Loan (EIDL) advances on loans that are not required to be repaid.

For background, see

• CRS Insight IN11378, IRS Guidance Says No Deduction Is Allowed for Business Expenses Paid with Forgiven PPP Loans, by Sean Lowry and Jane G. Gravelle.
• CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
• CRS Insight IN11370, SBA EIDL and Emergency EIDL Grants for COVID-19, by Bruce R. Lindsay.

Tax Treatment of Restaurant Revitalization Grants

Under normal tax rules, a forgiven debt is treated as taxable income to the borrower. Prior legislation has allowed forgiven loans for certain programs (such as those provided by the Paycheck Protection Program, or PPP, and certain other small business loans) to be excluded from income. Following an IRS ruling that associated expenses would not be deductible, legislation specified that associated expenses would be deductible. This provision extends this treatment (exclusion from income and deduction of expenses) to additional grants made from the new Restaurant Revitalization Fund.

For background, see

• CRS Insight IN11378, IRS Guidance Says No Deduction Is Allowed for Business Expenses Paid with Forgiven PPP Loans, by Sean Lowry and Jane G. Gravelle.
• CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.

Modification of Exceptions for Reporting of Third Party Network Transactions

Credit card companies and electronic payment processors are required to annually file aggregate transaction reports with the IRS listing total annual payments to merchants (Internal Revenue Code §6050W). Prior to ARPA, a de minimus reporting exception provided that third-party settlement organizations were only required to report transactions of payees who received more than $20,000 and conducted more than 200 transactions per year. This provision modifies the threshold for reporting, setting it at $600 per year.

Modification of Treatment of Student Loan Forgiveness

Excludes from gross income qualifying student loans for postsecondary education discharged, for almost any reason, between December 31, 2020, and January 1, 2026. Qualifying student loans include all federal student loans, and certain private education and institutional loans. Hence, these amounts of discharged student loan debt will not be subject to taxation.

For background, see

• CRS Report R43571, Federal Student Loan Forgiveness and Loan Repayment Programs, coordinated by Alexandra Hegji.
• CRS Report R45931, Federal Student Loans Made Through the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers, by David P. Smole.

Section Title

Description

CRS Resources

Subtitle G—Promoting Economic Security

Part 1—2021 Recovery Rebates to Individuals

Recovery Rebates to Individuals

Would enact a third round of direct payments for individuals and households ("stimulus checks"). These payments would be structured as refundable tax credits against 2021 income taxes, but would be issued (and hence received) in 2021, as opposed to 2022 (when 2021 income tax returns will be filed). Amount and eligibility for the advanced credit would generally be based on information from 2020 income tax returns (or 2019 returns, if 2020 returns have not been filed when the advanced credit is initially issued). For households whose payment was based on 2019 income data, and who would be eligible to receive a larger payment based on 2020 data, the IRS would be directed to issue a supplementary payment (a "top up") within 90 days of the tax filing deadline or September 1, 2021, whichever date is earlier.

Payments would generally be issued per household and equal the sum of $1,400 per eligible individual ($2,800 for married joint filers) and $1,400 for each eligible dependent (including older children and adult dependents). For each individual who died before January 1, 2021, the payment amount would be reduced from $1,400 to $0.

The payment would phase out ratably (i.e., proportionally) between $75,000 and $100,000 for single filers, $112,500 and $150,000 for head of household filers, and $150,000 and $200,000 for married joint filers. The larger the total credit amount, the faster the payment would phase out using this method.

Eligible individuals and dependents would generally need to have a social security number (SSN) to receive the payment. (Adoption taxpayer ID numbers would also be valid for dependents.) The maximum payment amount ($1,400) would be reduced to $0 for each otherwise eligible individual or qualifying dependent who does not have an SSN (i.e., they have an individual taxpayer identification number, or ITIN, instead). This provision would not apply to married members of the Armed Forces if at least one spouse had an SSN. In such cases, they would be eligible for up to $2,800. If no eligible individual had an SSN (i.e., an unmarried taxpayer does not have an SSN or neither spouse of a married joint filing couple has an SSN), they would still receive a payment for a qualifying dependent with an SSN.

The advanced payment of the credit would generally be exempt from offset by Treasury prior to when the payment is issued for certain past-due debts owed by the recipient (including past-due child support). However, the amount the taxpayer would claim as a credit on their 2021 tax returns would generally be subject to offset.

For eligible individuals who did not file a 2020 or 2019 income tax return, the IRS would be given broad authority to make payments based on information available to the Treasury, in a similar manner as was done with the second round of payments enacted under P.L. 116-260.

Treasury would be directed to make payments to the U.S. territories (mirror code and non-mirror code) equal to the aggregate amount issued to their residents as a result of this provision. (Many territorial residents will receive this benefit under a version of the provision administered via the territorial government, rather than the IRS.)

These payments would not be taxable. In addition, like other tax credits, these payments would not count as income or resources for a 12-month period in determining eligibility for, or the amount of assistance provided by, any federally funded public benefit program.

If a taxpayer received a larger advanced credit in 2021 than they were eligible for on their 2021 income tax return, they generally would not be required to pay it back. If an individual received an advanced payment less than what they were eligible for on their 2021 income tax return, they could claim the difference on that return (filed in 2021).

For more information, see

• CRS Insight IN11604, COVID-19 and Direct Payments: Frequently Asked Questions (FAQs) About the Third Round of "Stimulus Checks" in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.
• CRS Insight IN11605, COVID-19 and Direct Payments: Comparison of First and Second Round of "Stimulus Checks" to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R46415, CARES Act (P.L. 116-136) Direct Payments: Resources and Experts, coordinated by Margot L. Crandall-Hollick.
• CRS Insight IN11576, COVID-19 and Direct Payments to Individuals: Comparison of the Second Round of "Stimulus Checks" in P.L. 116-260 to the First Round in the CARES Act (P.L. 116-136), by Margot L. Crandall-Hollick.
• CRS Insight IN11575, COVID-19 and Direct Payments to Individuals: Frequently Asked Questions (FAQs) About the Second Round of "Stimulus Checks" in P.L. 116-260, by Margot L. Crandall-Hollick.
• CRS Insight IN11580, COVID-19 and Direct Payments: Summary of the CASH Act (H.R. 9051, 116th Congress) Modifications to "Stimulus Checks", by Margot L. Crandall-Hollick.

Part 2—Child Tax Credit

Child Tax Credit Improvements for 2021

For 2021, would temporarily increase the amount of the child tax credit for low- and moderate-income taxpayers to up to $3,600 per child for a young child and up to $3,000 for older children by modifying several provisions of the existing credit. First, the bill would eliminate the earned-income-based phase-in of the refundable portion of the child credit (often referred to as the "additional child credit" or ACTC) and eliminate the maximum amount of the ACTC ($1,400). Hence, the child credit would be "fully refundable" and available to otherwise eligible taxpayers with no earned income. Second, the bill would increase the maximum age for an eligible child to 17. Third, the bill would increase the maximum amount of the credit from $2,000 per child to $3,600 per child for a young child (0-5 years old) and $3,000 per child for an older child (6-17 years old). This increase in the maximum child credit of $1,600 per child for young children and $1,000 per child for older children would gradually phase out at a rate of 5% as income exceeded specified thresholds until the credit amount equaled the current-law maximum of $2,000 per child. These thresholds would be $75,000 for single filers, $112,500 for head of household filers, and $150,000 for married joint filers. (The actual income level at which the credit phased down to $2,000 per child would depend on the number and age of qualifying children.) For most families, the credit would then remain at its current-law level and phase out when income exceeded the current-law thresholds of $200,000 ($400,000 for married joint filers).^a

Would direct the Treasury to issue half of the expected 2021 credit in periodic payments beginning July 1, 2021. These periodic payments would generally be of equal size. The remaining half of the total 2021 credit would be claimed on a 2021 income tax return filed in early 2022. The amount of the payments advanced in 2021 would be estimated based on 2020 income tax data, or if unavailable, 2019 income tax data. The advanced child credit payments would reduce the child credit received with a 2021 return. In cases where a taxpayer receives more in advanced payments than they are eligible for (whether due to changes in income, changes in filing status, or changes in the number of eligible children who live with the taxpayer between 2021 and the year that provides data on which the advanced credit is based [2020 or 2019]), taxpayers would generally need to repay total aggregate advanced payments. In cases where a taxpayer received excess advanced payments due to net changes in the number of qualifying children between 2020 (or 2019) and 2021, repayment obligations would be reduced for low- and moderate-income taxpayers. Specifically, taxpayers with income below $40,000 for single filers, $50,000 for head of household filers, and $60,000 for joint filers in 2021 would not need to repay up to $2,000 per qualifying child in advanced credit overpayments (the $2,000 amount is referred to as the "safe harbor amount"). Taxpayers with income above these thresholds but below $80,000 for single filers, $100,000 for head of household filers, and $120,000 for married joint filers would gradually have the safe harbor amount reduced to $0 per qualifying child. Hence, taxpayers with income over $80,000 for single filers, $100,000 for head of household filers, and $120,000 for married joint filers in 2021 would need to repay the entire amount of the overpayment.

The bill would create an online portal to allow taxpayers the options to opt out of receiving advanced payments and to provide information regarding changes in income, marital status, and number of qualifying children in order to modify the advanced credit amounts.

Advanced payments would not be subject to offset prior to when the payment is issued for certain past-due debts owed by the recipient. However, the amount the taxpayer claims as a credit on their 2021 tax returns would generally be subject to offset.

The bill would allow the Treasury to adjust income tax withholding to accommodate these advance payments.

Advanced payments would generally not be available to eligible residents of U.S. territories.

For more information, see

• CRS Insight IN11613, The Child Tax Credit: Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R41873, The Child Tax Credit: How It Works and Who Receives It, by Margot L. Crandall-Hollick.
• CRS Report R46502, The Child Tax Credit: Selected Legislative Proposals in the 116th Congress, by Margot L. Crandall-Hollick.

Application of the Child Tax Credit in Possessions

Would effectively expand child credit eligibility to residents of U.S. territories permanently. For "mirror code" territories, the Treasury would make payments equal to the territory's costs of the child tax credit. For American Samoa (a non-mirror code territory), the Treasury would make payments equal to the territory's costs of the child tax credit as if it were a mirror code territory. In contrast, eligible residents of Puerto Rico (also a non-mirror code territory) would file for the credit directly with the IRS.

For background, see

• CRS Report R44651, Tax Policy and U.S. Territories: Overview and Issues for Congress, by Sean Lowry.

Part 3—Earned Income Tax Credit

Strengthening the Earned Income Tax Credit for Individuals with no Qualifying Children

For 2021, would temporarily expand both eligibility for and the amount of the earned income tax credit (EITC) for taxpayers without qualifying children by modifying the eligibility age and credit formula.

Regarding eligibility age, would expand eligibility for the EITC for individuals with no qualifying children—sometimes referred to as the "childless EITC"—by reducing the minimum eligibility age from 25 to 19 for most workers. In other words, this change would allow most eligible workers ages 19 to 24 to claim the childless EITC. For students who are attending school at least part-time, the age limit would be temporarily reduced from 25 to 24.^b For former foster children and youth who are homeless, the minimum age would temporarily be reduced from 25 to 18. The bill would also temporarily eliminate the upper age limit, so workers aged 65 and older would be eligible.

Regarding the credit amount, would temporarily increase the childless EITC by increasing the earned income amount (the minimum income necessary to receive the maximum credit amount) and phaseout threshold amount (the maximum income level at which taxpayers receive the maximum credit amount before it begins to phase out) to $9,820 and $11,610, respectively, while also doubling the phase-in and phaseout rates from 7.65% to 15.3%. The maximum childless EITC would increase from $543 to $1,502 in 2021.

For more information, see

• CRS Insight IN11610, The "Childless" EITC: Temporary Expansion for 2021 under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2), by Margot L. Crandall-Hollick.

For background, see

• CRS Report R43805, The Earned Income Tax Credit (EITC): How It Works and Who Receives It, by Margot L. Crandall-Hollick, Gene Falk, and Conor F. Boyle.

Taxpayer Eligible for Childless Earned Income Credit in Case of Qualifying Children Who Fail to Meet Certain Identification Requirements

Would permanently allow taxpayers who currently cannot claim the childless EITC because all of their qualifying children do not have SSNs to be eligible to claim the childless EITC.

Credit Allowed in Case of Certain Separated Spouses

Would permanently allow married taxpayers who file their tax returns as married filing separately to claim the EITC if they live with a child for whom they can claim the EITC for more than half the year and either (1) do not have the same principal place of abode as their spouse for the last six months of the year, or (2) have a decree, instrument, or agreement (i.e., other than a divorce decree) and do not live with their spouse at the end of the year.

Modification of Disqualified Investment Income Test

Would permanently modify the disqualified investment income test. Under current law, taxpayers with investment income over a certain threshold—$3,650 in 2020 and 2021—are ineligible for the EITC. Disqualified investment income is defined as interest income (including tax-exempt interest), dividends, net rent, net capital gains, and net passive income. It also includes royalties from sources other than the filer's ordinary business activities. This provision would permanently raise this amount to $10,000 and annually adjust it for inflation beginning in 2022.

Application of Earned Income Tax Credit in Possession of the United States

Would permanently provide authority to make payments to Puerto Rico, American Samoa, and mirror-code territories for amounts they pay out in the EITC. For Puerto Rico and American Samoa, such payments would be contingent upon increasing the amount of their EITC or enacting an EITC, respectively.

Temporary Special Rule for Determining Earned Income for Purposes of Earned Income Tax Credit

For the purposes of calculating their EITC on their 2021 income tax return, would allow taxpayers to substitute their 2019 earned income for their 2021 earned income if their earned income at the end of 2021 was less than their 2019 earned income.

Part 4—Dependent Care Assistance

Refundability and Enhancement of Child and Dependent Care Tax Credit

For 2021, would temporarily expand the child and dependent care credit by making the credit refundable and making it larger for most workers. The CDCTC credit amount is a product of the amount of qualifying expenses (which is subject to a cap) and the credit rate. The bill would increase the cap on qualifying expenses from $3,000 for one child and $6,000 for two or more children to $8,000 and $16,000, respectively. The bill would also increase the credit rate for workers with $183,000 or less of income (the credit rate would remain the same as under current law for those with income over $183,000 up to $400,000 [i.e., 20%], and be reduced from current law for those with over $400,000 of income). Specifically, for those with less than $125,000 of income, the credit rate would increase to 50% (from 35%) of expenses. This 50% credit rate would gradually phase down to 20% until taxpayers had $183,000 of income. For those with more than $183,000 of income up to $400,000, the credit rate would then remain at 20%, gradually falling to zero when income exceeds $438,000. As a result, those with income over $438,000 would not be eligible for the credit.

By making the credit refundable, the bill would effectively expand eligibility to lower-income taxpayers. Under current law, the CDCTC is a nonrefundable credit, meaning the value of the credit cannot exceed a taxpayer's income tax liability. As a result, those with little or no income tax liability, including many low-income taxpayers, receive little or no benefit from the current credit.

In combination, these changes would increase the maximum amount of the CDCTC from $2,100 to $8,000, based on expenses and income.

The bill would allow the Treasury to make payments to Puerto Rico, American Samoa, and mirror-code territories for the cost of providing the refundable CDCTC in 2021 to their territorial residents. (Non-mirror code territories [i.e., Puerto Rico and American Samoa] would need to develop a plan, approved by the Treasury Secretary, to distribute the amounts of the refundable CDCTC to their residents.)

For background, see

• CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them, by Margot L. Crandall-Hollick and Conor F. Boyle.

Increase in Exclusion for Employer-Provided Dependent Care Assistance

For 2021, would temporarily increase the maximum amount of qualifying child care expenses that eligible taxpayers could exclude from their income from $5,000 to $10,500.

Part 5—Credits for Paid Sick and Family Leave

Payroll Credits

Would extend the Families First Coronavirus Response Act (FFCRA; P.L. 116-127) employer payroll tax credits for paid sick and paid family leave from March 31, 2021, through September 30, 2021.

FFCRA paid sick leave was limited to 10 days per employee. This provision would reset the 10-day limit, starting April 1, 2021, for employers claiming the credit for paid sick leave provided to their employees.

Would expand the paid sick and paid family leave credits to allow credits for leave taken to obtain immunization related to COVID-19 or recover from any injury, disability, illness, or condition related to COVID-19 immunization.

Would expand the definition of qualifying paid family leave to allow family leave payroll tax credits to be claimed for all qualifying uses of paid sick time, including for leave provided if the employee is subject to a quarantine or isolation order due to COVID-19 or is caring for someone in a similar situation.

The tax credit for family leave wages is limited to $200 per day, and $10,000 total per employee. This provision would increase this limit on the tax credit for paid family leave wages, allowing the credit on up to $12,000 in paid family leave wages.

Would add a nondiscrimination rule to the paid leave payroll tax credits, providing employers could not claim the credits if paid leave provided to employees discriminates in favor of highly compensated employees or full-time employees, or discriminates on the basis of employment tenure with the employer.

The paid sick and paid family leave tax credits are currently claimed against the Old-Age, Survivors and Disability Insurance (OASDI) tax, or the equivalent amount of the Railroad Retirement Tax Act (RRTA) tax. This provision would restructure the paid sick and family leave payroll tax credits to be claimed against the employer's share of the hospital insurance (HI) payroll tax, after March 31, 2021. The employer's share is 1.45% of wages paid to employees. This credit would not affect amounts transferred to the Federal Hospital Insurance Trust Fund.

Government employers, including state and local government employers, are not allowed to claim paid leave payroll tax credits. This provision would provide that 501(c)(1) organizations and 501(a) organizations could claim the tax credits, making certain state and local governments, as well as 501(c)(1) federal government instrumentalities, tax-credit eligible.

Provision provides that paid sick and paid family leave payroll tax credits can be increased by the employer's share of OASDI and HI payroll taxes (and equivalent RRTA tax) for the paid leave wages. Denial of double benefit applies, and gross income of the employer is increased by the amount of the credit provided by this section.

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock.

Credit for Sick Leave for Certain Self-Employed Individuals

Under FFCRA, self-employed individuals are allowed a refundable income tax credit for paid sick leave. This provision would extend and expand the paid sick leave tax credits for self-employed individuals, similar to the modifications made for employers (described above).

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock.

Credit for Family Leave for Certain Self-Employed Individuals

Under FFCRA, self-employed individuals are allowed a refundable income tax credit for paid family leave. This provision would extend and expand the paid family leave tax credits for self-employed individuals, similar to the modifications made for employers (described above). Tax credits could be claimed for up to 60 days of family leave for self-employed individuals.

For background, see

• CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Family Leave, by Molly F. Sherlock

Part 6—Employee Retention Credit

Extension of Employee Retention Credit

Through June 30, 2021, the employee retention and rehiring tax credit is 70% of qualified wages. The refundable payroll credit can be computed on up to $10,000 in qualified wages paid to an eligible employee per calendar quarter. Thus, the maximum credit amount for 2021 is $14,000 (70% of up to $20,000 in qualified wages paid over the first two quarters). Qualified wages depend on the number of employees the employer had in 2019. For employers with more than 500 full-time employees, qualified wages are wages paid when employee services are not provided. For employers with 500 or fewer full-time employees, all wages paid by eligible employers are credit-eligible.

This provision would extend the employee retention credit through December 31, 2021. The credit would be restructured to be claimed against the employer's share of the hospital insurance (HI) payroll tax (as opposed to the OSADI and equivalent amount of RRTA tax).

For background, see

• CRS In Focus IF11721, The Employee Retention and Employee Retention and Rehiring Tax Credits, by Molly F. Sherlock.

Part 7—Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers

For 2021 and 2022, would temporarily expand eligibility for and the amount of the premium tax credit (PTC) by modifying the income eligibility criteria and credit formula.

Regarding income, would temporarily expand eligibility by eliminating the current-law phaseout for households with annual incomes above 400% of the federal poverty level (FPL).

Regarding the formula, would temporarily increase the credit amount by reducing the percentage of annual income that eligible households would be required to contribute toward the premium. The temporary percentages would range from 0.0% to 8.5% of household income, with higher-income groups subject to the larger percentages, as specified.

For background, see

• CRS Report R44425, Health Insurance Premium Tax Credits and Cost-Sharing Subsidies, by Bernadette Fernandez.

Temporary Modification of Limitations on Reconciliation of Tax Credits for Coverage Under a Qualified Health Plan with Advance Payments of Such Credit

For 2020, would temporarily provide tax relief to individuals who would be subject to the current-law requirement to pay back PTC amounts that were provided in excess. Would temporarily suspend the recapture of excess credit amounts under the current tax reconciliation process.

Application of Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021

For 2021, would temporarily expand eligibility for and the amount of the PTC for certain individuals who receive unemployment compensation (UC). Would temporarily deem individuals who receive UC for any week in calendar year 2021 to have met the PTC income eligibility criteria. Would temporarily disregard any household income above 133% FPL.

For background, see

• CRS Report R45478, Unemployment Insurance: Legislative Issues in the 116th Congress, by Julie M. Whittaker and Katelin P. Isaacs.

Part 8—Miscellaneous Provisions

Repeal of Election to Allocation Interest, Etc. on Worldwide Basis

U.S. firms are eligible for foreign tax credits up to the amount of U.S. tax paid on foreign-source income. To impose this limit, U.S. and foreign-source income must be determined. Certain deductions are allocated between U.S. and foreign sources, including interest. Until 2021, firms allocated interest excluding that paid by foreign firms (called "waters edge" allocation). Under current law, beginning in 2021, firms can elect to include interest paid by related foreign firms. This treatment is called worldwide allocation. It is beneficial for some firms because some of the interest paid for foreign firms is allocated to U.S. sources, increasing foreign-source income, increasing the limit on the foreign tax credit and, thus, increasing foreign tax credits that reduce tax liability. A provision was adopted in 2004 to move to worldwide allocation, but it has been delayed by other legislation and is scheduled to begin in 2021. This provision would repeal the election to move to worldwide allocation.

For background, see

• CRS Report RL34494, The Foreign Tax Credit's Interest Allocation Rules, by Jane G. Gravelle and Donald J. Marples.

Tax Treatment of Targeted Economic Injury Disaster Loan Advances

Under normal tax rules, a forgiven debt is generally treated as taxable income to the borrower. Prior legislation has allowed forgiven loans for certain programs (such as those provided by the Paycheck Protection Program, or PPP, and certain other small business loans) to be excluded from income. Following an IRS ruling that associated expenses would not be deductible, legislation specified that associated expenses would be deductible. This provision would extend this treatment (exclusion from income and deduction of expenses) to additional Economic Injury Disaster Loan (EIDL) advances on loans that are not required to be repaid.

For background, see

• CRS Insight IN11378, IRS Guidance Says No Deduction Is Allowed for Business Expenses Paid with Forgiven PPP Loans, by Sean Lowry and Jane G. Gravelle.
• CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.
• CRS Insight IN11370, SBA EIDL and Emergency EIDL Grants for COVID-19, by Bruce R. Lindsay.

Tax Treatment of Restaurant Revitalization Grants

Under normal tax rules, a forgiven debt is treated as taxable income to the borrower. Prior legislation has allowed forgiven loans for certain programs (such as those provided by the Paycheck Protection Program, or PPP, and certain other small business loans) to be excluded from income. Following an IRS ruling that associated expenses would not be deductible, legislation specified that associated expenses would be deductible. This provision would extend this treatment (exclusion from income and deduction of expenses) to additional grants made from the new Restaurant Revitalization Fund.

For background, see

• CRS Insight IN11378, IRS Guidance Says No Deduction Is Allowed for Business Expenses Paid with Forgiven PPP Loans, by Sean Lowry and Jane G. Gravelle.
• CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry.

Modification of Exceptions for Reporting of Third Party Network Transactions

Credit card companies and electronic payment processors are required to annually file aggregate transaction reports with the IRS listing total annual payments to merchants (Internal Revenue Code §6050W). A de minimus reporting exception provides that third-party settlement organizations are only required to report transactions of payees who receive more than $20,000 and conduct more than 200 transactions per year. This provision would modify the threshold for reporting, setting it at $600 per year.

Provision

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2021-2031

Part 1—2021 Recovery Rebates to Individuals

Recovery Rebates to Individuals

393,714

16,918

-

-

-

-

-

-

-

-

-

410,632

Part 2—Child Tax Credit

Child Tax Credit: Improvements for 2021 and Application of the Child Tax Credit in Possessions

25,826

79,249

710

721

725

721

307

311

316

320

323

109,529

Part 3—Earned Income Tax Credit

Strengthening the Earned Income Tax Credit for Individuals with no Qualifying Children

521

11,361

-

-

-

-

-

-

-

-

-

11,882

Taxpayer Eligible for Childless Earned Income Credit in Case of Qualifying Children Who Fail to Meet Certain Identification Requirements

(i)

12

2

1

1

1

2

2

2

2

2

26

Credit Allowed in Case of Certain Separated Spouses

1

20

21

22

23

25

25

27

28

30

31

252

Modification of Disqualified Investment Income Test

24

330

198

200

225

229

238

233

231

240

251

2,399

Application of Earned Income Tax Credit in Possession of the United States

-

738

746

764

781

798

814

831

849

867

885

8,074

Temporary Special Rule for Determining Earned Income for Purposes of Earned Income Tax Credit

-

3,185

-

-

-

-

-

-

-

-

-

3,185

Total of Earned Income Tax Credit

546

15,646

967

987

1,030

1,053

1,079

1,093

1,110

1,139

1,169

25,818

Part 4—Dependent Care Assistance

Refundability and Enhancement of Child and Dependent Care Tax Credit

2,127

5,837

-

-

-

-

-

-

-

-

-

7,964

Increase in Exclusion for Employer-Provided Dependent Care Assistance

78

39

-

-

-

-

-

-

-

-

-

117

Total of Dependent Care Assistance

2,205

5,876

-

-

-

-

-

-

-

-

-

8,081

Part 5—Credits for Paid Sick and Family Leave

Extension and Modification of Credits for Paid Sick and Family Leave

4,506

1,747

(ii)

(ii)

(ii)

(ii)

(ii)

-

-

-

-

6,253

Part 6—Employee Retention Credit

Extension and Modification of the Employee Retention Credit

3,076

7,146

(ii)

(ii)

(ii)

(ii)

(ii)

-

-

-

-

10,222

Part 7—Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers

4,137

22,234

7,964

536

-23

-

-

-

-

-

-

34,847

Temporary Modification of Limitations on Reconciliation of Tax Credits for Coverage Under a Qualified Health Plan with Advance Payments of Such Credit

4,696

1,565

-

-

-

-

-

-

-

-

-

6,261

Application of Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021

2,624

1,660

232

-

-

-

-

-

-

-

-

4,516

Total of the Premium Tax Credit

11,457

25,459

8,196

536

-23

-

-

-

-

-

-

45,624

Part 8—Miscellaneous Provisions

Repeal of Election to Allocation Interest, Etc. on Worldwide Basis

-335

-1,277

-2,023

-2,284

-2,383

-2,334

-2,358

-2,385

-2,343

-2,283

-2,327

-22,331

Tax Treatment of Targeted EIDL Advances

Estimate Not Available^a

Tax Treatment of Restaurant Revitalization Grants

Estimate Not Available^a

Modification of Exceptions for Reporting of Third Party Network Transactions

-

-146

-1,081

-751

-789

-829

-870

-913

-959

-1,007

-1,057

-8,403

Modification of Treatment of Student Loan Forgiveness

1

8

8

9

9

9

(i)

(i)

-

-

-

44

Total of Miscellaneous Provisions

-334

-1,415

-3,096

-3,026

-3,163

-3,154

-3,228

-3,298

-3,302

-3,290

-3,384

-30,690

Provision

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2021-2031

Part 1—2021 Recovery Rebates to Individuals

Recovery Rebates to Individuals

404,937

17,400

-

-

-

-

-

-

-

-

-

422,337

Part 2—Child Tax Credit

Child Tax Credit: Improvements for 2021 and Application of the Child Tax Credit in Possessions

25,826

79,249

710

721

725

721

307

311

316

320

323

109,529

Part 3—Earned Income Tax Credit

Strengthening the Earned Income Tax Credit for Individuals with no Qualifying Children

521

11,361

-

-

-

-

-

-

-

-

-

11,882

Taxpayer Eligible for Childless Earned Income Credit in Case of Qualifying Children Who Fail to Meet Certain Identification Requirements

⁽ⁱ⁾

12

2

1

1

1

2

2

2

2

2

26

Credit Allowed in Case of Certain Separated Spouses

1

20

21

22

23

25

25

27

28

30

31

252

Modification of Disqualified Investment Income Test

24

330

198

200

225

229

238

233

231

240

251

2,399

Application of Earned Income Tax Credit in Possession of the United States

-

738

746

764

781

798

814

831

849

867

885

8,074

Temporary Special Rule for Determining Earned Income for Purposes of Earned Income Tax Credit

-

3,185

-

-

-

-

-

-

-

-

-

3,185

Total of Earned Income Tax Credit

546

15,646

967

987

1,030

1,053

1,079

1,093

1,110

1,139

1,169

25,818

Part 4—Dependent Care Assistance

Refundability and Enhancement of Child and Dependent Care Tax Credit

2,127

5,837

-

-

-

-

-

-

-

-

-

7,964

Increase in Exclusion for Employer-Provided Dependent Care Assistance

78

39

-

-

-

-

-

-

-

-

-

117

Total of Dependent Care Assistance

2,205

5,876

-

-

-

-

-

-

-

-

-

8,081

Part 5—Credits for Paid Sick and Family Leave

Extension and Modification of Credits for Paid Sick and Family Leave

4,409

1,742

(ii)

(ii)

(ii)

(ii)

(ii)

-

-

-

-

6,151

Part 6—Employee Retention Credit

Extension and Modification of the Employee Retention Credit

2,791

5,993

(ii)

(ii)

(ii)

(ii)

(ii)

-

-

-

-

8,784

Part 7—Premium Tax Credit

Improving Affordability by Expanding Premium Assistance for Consumers

4,137

22,234

7,964

536

-23

-

-

-

-

-

-

34,847

Temporary Modification of Limitations on Reconciliation of Tax Credits for Coverage Under a Qualified Health Plan with Advance Payments of Such Credit

4,696

1,565

-

-

-

-

-

-

-

-

-

6,261

Application of Premium Tax Credit in Case of Individuals Receiving Unemployment Compensation During 2021

2,624

1,660

232

-

-

-

-

-

-

-

-

4,516

Total of the Premium Tax Credit

11,457

25,459

8,196

536

-23

-

-

-

-

-

-

45,624

Part 8—Miscellaneous Provisions

Repeal of Election to Allocation Interest, Etc. on Worldwide Basis

-335

-1,277

-2,023

-2,284

-2,383

-2,334

-2,358

-2,385

-2,343

-2,283

-2,327

-22,331

Tax Treatment of Targeted EIDL Advances

Estimate Not Available^a

Tax Treatment of Restaurant Revitalization Grants

Estimate Not Available^a

Modification of Exceptions for Reporting of Third Party Network Transactions

-

-146

-1,081

-751

-789

-829

-870

-913

-959

-1,007

-1,057

-8,403

Total of Miscellaneous Provisions

-335

-1,423

-3,104

-3,035

-3,172

-3,163

-3,228

-3,298

-3,302

-3,290

-3,384

-30,734