by Whitney Oachs, Researcher
On March 11, 2021, President Biden signed the American Rescue Plan into law. This bipartisan legislation was designed to enable Americans to respond to and recover from the impacts of COVID-19.
Under the American Rescue Plan, the Economic Development Administration was allocated $3 billion in supplemental funding to assist communities nationwide in their efforts to accelerate the economic recovery from the coronavirus pandemic and build local economies that will be resilient to future economic shocks.
Of the $3 billion total, $300 million in funds will be allocated specifically to rural infrastructure and housing, $240 million will be for the tourism, leisure and hospitality industry, $500 million for workforce training and wraparound services like childcare access, and $100 million for Indigenous/tribal communities.
The Rural Housing Service (RHS), an agency within the U.S. Department of Agriculture’s Rural Development, is also receiving up to $500 million in grant funding to establish the Emergency Rural Health Care (ERHC) Grant Program. These funds will be made available two two tracks eligible applicants:
- Recovery grants to offer support for rural health care services in the form of immediate relief to address the economic conditions arising from the COVID-19 emergency.
- Impact grants to offer longer-term funding to advance ideas and solutions to support long-term sustainability of rural health.
Finally, the plan has made changes to the Child Tax Credit, which has been a part of American tax policy since its implementation in 1997. The tax credit reduces total income taxes for people with children. The changes enacted by the American Rescue Plan include:
- Increased credit amount. The American Rescue Plan increased the amount of the Child Tax Credit from $2,000 to $3,600 for children under age 6, and $3,000 for other children under age 18. The Center for American Progress estimates that this expansion could reduce the number of children living in poverty by 45%.
- Scope of credit has been expanded. Children 17 years old and younger, as opposed to 16 years old and younger, will now be covered by the Child Tax Credit.
- Credit amounts will be made through advance payments during 2021. Individuals eligible for a 2021 Child Tax Credit will receive advance payments of the individual’s credit, which the IRS and the Bureau of the Fiscal Service will make through periodic payments from July 1 to December 31, 2021. This change will allow struggling families to receive financial assistance now, rather than waiting until the 2022 tax filing season to receive the Child Tax Credit benefit.
- The credit is now fully refundable. By making the Child Tax Credit fully refundable, low-income households will be entitled to receive the full credit benefit, as significantly expanded and increased by the American Rescue Plan.
How can communities apply for funds?
For community and public organizations interested in applying for these funds, visit grants.gov and search for grant opportunities using the keyword “American Rescue Plan” in the upper-right corner. From there, a list of available grants will appear. Click on the “opportunity number” next to each grant to see a description, agency in charge of distribution, and list of eligible applicants. If the grant is right for you and your organization, apply using your grants.gov username and password or register as a new user.
The deadline to apply for these funds varies based on the program, though all governors and state offices have received information packets on available funding and are encouraged to apply before January 31, 2022, to ensure adequate time for review.