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News broke on the evening of March 11, 2021, that Biden’s American Rescue Plan Act of 2021 had been signed into law, sending $1.9 trillion in Coronavirus relief to individual Americans and small businesses.

Here are the highlights of the finalized American Rescue Plan.

Stimulus Payments

• Additional individual stimulus payments up to $1400 per person

Student Loan Forgiveness

• Student loan forgiveness will be tax-free between 2021 and 2025.

Unemployment

• Unemployment benefits extended through September 6, 2021, and include an additional $300 per week.

The first $10,2000 of unemployment payments will be nontaxable for households with income under $150,000

Child Tax Credit

• Child tax credit increase for 2021 to $3,000 for children ages 6-17 and $3600 for children under 6, as phased out for income limitation.

• Credit is fully refundable and intended to be paid out as direct advance payments

Dependent Care Credit

• Dependent care credit increase for 2021 from 35% to 50% of eligible expenses

• Modified the points at which the credit begins to phase out.

• Employer-provided dependent care assistance amounts have been significantly increased.

Family and Sick Leave Credits

• Credits extended through September 30, 2021, and expanded.

• Includes an increase in applicable wages to $12,000.

• Time off to receive the vaccine is now a valid reason to claim credit

• Allows employees to have a second 10-day limitation period

Employer Pension Plan

• Relief for employer pension plan funding obligations

COBRA Payments

• Federal subsidies of COBRA payments up to 100% through September

• Excludes the premium reduction from income

Paycheck Protection Program

• $7.25 billion of additional funds allocated for Paycheck Protection Program loans.

• Additional non-profit eligibility added.

  • Section 501 (c) Non-profits that were not originally included for PPP funds due to employee count restrictions are now eligible.

  • 501 (c) (3) organizations that have under 500 employees per physical location can now qualify

  • Other 501 (c) (6) organizations like domestic marketing organizations and other non-profits with under 300 employees per physical location qualify

Economic Injury Disaster Loans

• $15 billion allocated for EIDL advance payments

• For businesses with under 300 employees that have suffered a 30% economic loss and located in low-income communities (as defined).

Restaurant Revitalization Fund

• $25 billion in relief for restaurants, bars, and other eligible food and drink providers

• Grants available for pandemic-related revenue losses, up to $5 million per physical location and $10 million per entity.

• Funds can be used to pay payroll costs, mortgage interest, rent, utilities, maintenance costs, supplies, food and beverage expenses, covered supplier costs, operational expenses, and any other essential expenses towards maintaining the eligible entity.

• When applying, applicants will have to certify that the grant is necessary to operate due to economic uncertainties

• These funds cannot be used in addition to Shuttered Venue Operation Grant funds, nor can both be applied for by the same entity.

Shuttered Venue Operation Grant

• $1.25 billion for shuttered venue operation grant funds

• Entities can apply for this added allowance alongside PPP loans for a net reward.

• Employee Retention Credits

• Credits extended through December 31, 2021.

• Credits expanded to cover all wages paid for qualified businesses and to include recovery startup businesses.

Have questions about how these changes impact you? Our team of experts has the answers and is ready to help. Contact us today to set up a meeting.