Summary: The House of Representatives passed the American Rescue Plan Act of 2021, a COVID-19 relief bill that includes direct payments (“recovery rebates”) to families. The rebate value is set to $1,400 per person (including dependents), phasing out over an income range of $75,000 to $100,000 for single filers ($112,500 to $150,000 for head of household filers and $150,000 to $200,000 for married filers). PWBM projects that this provision would cost $428 billion, with 93 percent of families receiving a payment.
| Income group | Average benefit | Share with a benefit | Average benefit for those with a benefit | Percent change in after-tax income | Share of benefit | Share of federal taxes paid (before tax change) | Share of federal taxes paid (after tax change) |
|---|---|---|---|---|---|---|---|
| Bottom quintile | $1,920 | 100% | $1,920 | 40% | 22% | 0% | -4% |
| Second quintile | $2,595 | 100% | $2,595 | 10% | 22% | 3% | 0% |
| Middle quintile | $2,685 | 100% | $2,685 | 6% | 22% | 11% | 9% |
| Fourth quintile | $2,960 | 95% | $3,125 | 4% | 21% | 19% | 19% |
| 80-90% | $3,270 | 86% | $3,825 | 3% | 10% | 15% | 16% |
| 90-95% | $1,210 | 48% | $2,500 | 1% | 2% | 11% | 13% |
| 95-99% | $340 | 11% | $3,245 | 0% | 0% | 16% | 19% |
| 99-99.9% | $0 | 0% | $0 | 0% | 0% | 13% | 15% |
| Top 0.1% | $0 | 0% | $0 | 0% | 0% | 12% | 14% |
Note: “Income” is defined as AGI plus: above-the-line deductions, nontaxable interest income, nontaxable Social Security benefits, nontaxable pensions and annuities, employer-side payroll taxes, and corporate liability. Note that this definition excludes transfer income and thus understates low-income tax units' income.