On March 11, the $1.9 trillion American Rescue Plan Act (ARPA) was signed into law. The plan includes direct payments and increased child tax credits, increased unemployment benefits, mortgage and utility relief, as well as funding that will be distributed to state and local governments, K-12 schools, and colleges.
Businesses both small and large will want to pay attention to several key aspects of the American Rescue Plan Act:
Expansion of Paycheck Protection Program (PPP): To date, $662 billion in forgivable loans have been dispersed through the PPP. The ARPA allocates an additional $7.25 billion while making the funding available to an expanded set of non-profit organizations as well as digital news services.
Expansion of the Shuttered Venue Operators Grant (SVOG): In addition to providing more funding for shuttered venues, the ARPA now allows companies to apply for both a PPP loan and the SVOG program.
Changes to Employee Benefits: The ARPA provides a federal subsidy for employees who elect to continue medical coverage through COBRA and also allows companies to extend the option for employees to elect for a different level of healthcare coverage when opting into COBRA. In addition, the ARPA increases dependent care flexible spending limits from $5,000 to $10,500 (and from $2,500 to $5,250 for married individuals filing separately). There are also relief plans available for both single and multiemployer pension plans.
Expanding Tax Credits for Employee Leave: ARPA expands on the reasons for covered sick leave under the Families First Coronavirus Response Act (FFCRA) to include time for receiving or recovering from the COVID-19 vaccine or waiting for COVID-19 test/diagnostic results. Employers who voluntarily provide FFCRA paid sick or family leave will receive tax credits through September 30, 2021. The amount of a tax credit refund has also increased for employees who take both paid sick and paid family leave.
Unemployment Insurance: The ARPA extends several key unemployment benefits that were first made available through the CARES Act and Consolidated Appropriations Act (the first two stimulus plans). These programs are funded entirely by the federal government and not by employers.
Relief for Restaurants: The ARPA allocates $28.6 billion to the Restaurant Revitalization Fund.
Community Navigator Pilot Program: This $100 million allocation is designed to help organizations that are working to improve access to COVID-19 assistance programs and resources.
Want more information?
This comprehensive summary of the bill outlines the ARPA's impact, and the Small Business Association also has resources designed to help you understand and take advantage of the COVID-19 relief available through the American Rescue Plan Act and prior stimulus bills passed in 2020.
As always, if you are a business owner looking to understand how the American Rescue Plan Act can help you in 2021 and beyond, we invite you to contact the Robin S. Weingast & Associates team. We can walk you through your options and help you navigate any application or approval processes you need to benefit from the available relief. '