What benefit does the American Rescue Plan provide specifically for the tax year 2021?

The American Rescue Plan specifically includes a temporary increase in the Child Tax Credit for the tax year 2021, which is a significant aspect of the legislation aimed at providing financial relief to families. Under this plan, the Child Tax Credit increased from $2,000 per child to $3,600 for children under the age of six, and $3,000 for children ages six to seventeen. This enhancement allows families to receive more financial support, making it particularly beneficial for those with lower to moderate incomes who may have been adversely affected by the economic impacts of the pandemic. The increased credit is fully refundable, meaning that families can receive the full amount even if they do not owe federal income taxes, thus expanding the safety net for households during a challenging economic period.

Other options presented do not align with the specific benefits provided by the American Rescue Plan. The plan does not introduce new estate taxes, raise tax rates for high-income earners, or reduce tax credits; instead, it seeks to provide substantial fiscal support through targeted increases in certain tax credits to assist American families.