Key Takeaways from American Rescue Plan Act

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The $1.9 trillion American Rescue Plan Act of 2021 signed into law on March 11 includes another round of targeted support for small businesses. See the updated federal relief highlights. In addition, this simple chart shows the options available, and the business provisions summary provides details on the highlights below.

Paycheck Protection Program (PPP) 

  • Provides an additional $7.25 billion for the PPP—application deadline remains March 31, 2021; however, proposed legislation could extend this deadline.
  • Expands loan eligibility to include more tax-exempt organizations and other businesses not originally able to participate.

EIDL and industry-relief grants

  • Provides additional money for the Economic Injury Disaster Loan (EIDL)—covered period is through Dec. 31, 2021.
  • Provides an additional $15 billion for the Targeted EIDL Advance program—specifically for businesses located in low-income communities that didn’t get the full EIDL grant previously. Those hardest hit may qualify for an additional $5,000 tax-exempt advance grant.
  • New Restaurant Revitalization Grant (RRG) provides up to $28.6 billion of relief to privately held restaurants, bars, caterers, and similar businesses with 20 or less physical locations.

Extension of payroll and tax credits

  • Employee Retention Tax Credit—extended through Dec. 31, 2021.
  • Payroll credit for Families First Sick Pay and Leave—extended through Sept. 30, 2021, and may be available to a business, even if it received the PPP loan or Restaurant Revitalization Grant.

COBRA continuation coverage benefits

A new 100% Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidy for premiums paid for coverage between April 1 and Sept. 30, 2021, is available to qualifying employees who lost their jobs or had significantly reduced hours. To offset this expense to employers, the new legislation allows the business to take a quarterly tax credit (against the Medicare payroll tax) corresponding to the amount of the COBRA premiums the business would have received from eligible recipients.

We expect more detailed information from the Department of Labor (DOL) within the next 30 days, but no definite date is set. Employers should work with COBRA administrators to identify any eligible individuals who will need to be notified of this subsidy.
 

Additional resources

Use this email to share the federal relief resources with your business clients. 


Visit our COVID-19 Response webpage to see more updated client tools, including the individual provisions summary.