Tax season is about to get underway and individuals are looking for ways to minimize federal income taxes. Fortunately, the American Rescue Plan Act of 2021 (ARPA) (P.L. 117-2) created tax-free treatment for certain items and extended existing tax-free treatment for others. In addition, there are a number of rules—both old and new—that provide tax-free treatment for individuals.
Due to COVID-19, Congress created a number of tax breaks that offer tax-free income opportunities. These pandemic-related exclusions from gross income include: