American Rescue Plan Act

by | Mar 16, 2021 | Covid-19, Tax

The American Rescue Plan Act (ARPA) of 2021 is a $1.9 trillion economic stimulus bill signed into law on March 11, 2021.

Some of the highlights of the business provisions include:

  • Employee retention credit –
    • Extended for quarters through December 31, 2021
    • The refundable tax credit equal to 70% of employee compensation (inclusive of health insurance) up to $10,000 per employee per quarter through December 31, 2021 yields a potential total 2021 credit available of $28,000 per employee.
  • Paid sick and family leave credits –
    • Extended for quarters through September 30, 2021
    • Expands reasons for paid leave: vaccine appointment and complications from receiving the vaccine
    • Paid family leave credit increased to $12,000 per employee
  • Restaurant revitalization grants –
    • $10,000,000 grants, limited to $5,000,000 per physical location, based on the loss of revenue during the pandemic
    • Eligible – restaurants and other specified businesses (including those in airport terminals)
    • Not eligible – state or local government operated businesses, companies that operate in more than 20 locations as of March 13, 2020, and businesses with outstanding applications for, or that received a grant under, the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act
    • Funds eligible for payroll costs, mortgage payments, rent, utilities, maintenance expenses, supplies, food and beverage expenses, covered supplier costs, operational expenses, paid sick leave and any other expense determined to be essential to maintaining the business
  • Paycheck Protection Program –
    • eligibility expanded to include additional nonprofits
  • Economic Injury Disaster Loan (EIDL) grants –
    • received additional funding

Some of the individual provisions include:

  • $1,400 stimulus payments for eligible taxpayers and dependents
  • Unemployment benefits
    • extended through September 6, 2021
    • the first $10,200 in unemployment benefits received during 2020 – exempted from income tax for certain individuals
  • 2021 Child tax credit
    • Expanded to dependents aged 17
    • Increased to $3,000 ($3,600 for children under age 6) but phased out at certain modified adjusted gross income amounts, depending on filing status
  • 2021 Child and dependent care credit
    • Refundable credit
    • Limit for taxpayers is increased to $4,000 per qualifying individual, limited to $8,000 for two or more qualifying individuals
  • Certain student loan discharges excluded from taxable income

 

Please contact Weinstein Spira for more information on the ARPA.

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