LM7805 Voltage Drop too big
You have miswired the ATmega328P MCU on the breadboard.

This is a crop from your photo, showing the problems:



You have connected the Gnd rail to pin 20, which is the AVcc pin and should be connected to Vcc (through an optional filter). The MCU might have been damaged by this miswiring.

You have also connected the power &amp; Gnd rails to pins 8 &amp; 9 instead of the correct pins 7 &amp; 8. Again, that might have caused internal damage to the MCU.

The miswiring (especially connecting AVcc pin 20 to Gnd) must be causing an excessive current inside the MCU, so that the regulator can only maintain that 1.4V which you measured on its output. This was confirmed since you updated that the correct 5V was measured on the regulator output, when the MCU was removed from the miswired breadboard.