On March 11, President Biden signed into law the American Rescue Plan Act (ARPA), a 1.9 trillion stimulus package aimed to speed up the United States’ recovery from the economic and health effects of the COVID-19 pandemic.  As you know by now, there are a significant amount of provisions included in the ARPA.

Below are some of the highlights:

• Extends the FFCRA paid sick time and paid family leave tax credits beginning April 1 through September 30, 2021 and remains refundable and advanceable through IRS Form 7200.

• Includes a 100% COBRA premium subsidy for any employee or dependent who is a COBRA qualified beneficiary (or will become one), resulting from an involuntary termination of employment or a reduction of hours between April 1 and September 30, 2021.

• Extends Unemployment Benefits: federal unemployment supplement of $300 a week, which was scheduled to expire on March 14th, is renewed through September 6th.

• Authorizes Stimulus Checks: authorizes the Internal Revenue Service (IRS) to pay up to $1,400 to individuals and an additional $1,400 for each dependent of the taxpayer up to specified income limits. The amount will be reduced – or eliminated – for people with an income above a certain amount.

• Provides assistance to restaurant, bars, and shuttered venues by establishing a $29 billion Restaurant Revitalization Fund (RRF) to address the pandemic’s devastating impact on the food services industry.

• Restores the State Small Business Credit Initiative (SSBCI), which expired in 2017. The program provides federal funding to deliver flexible, affordable capital to small businesses across the nation. The new iteration of the program will provide $10 billion in funding to support small businesses recovering from the economic impacts of the COVID–19 pandemic.

• Allocates an additional $7.25 billion towards Paycheck Protection Program funding and adds additional covered nonprofit entity as an eligible nonprofit for first and second draw PPP loans. (The deadline to submit a PPP loan application has not been extended, so organizations eligible to apply for a second draw PPP loan must do so by March 31, 2021.)

• Extends the Employee Retention Credit from June 30, 2021 to December 31, 2021. The rate of credit will continue at 70% for this extended period of time

• Increases the Child Tax Credit and the Earned Income Tax Credit from $2,000 to $3,000 for each child over age six and $3,600 for each child who is under age six as of the close of the calendar year.

Written By:

Jennifer Adams | HR Consultant