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American Rescue Plan for Businesses

Tax

3 min read

Whether you are in need of rescue or not, Congress has passed the American Rescue Plan (ARP). This is the sweeping $1.9 trillion relief bill you undoubtedly heard of. The bill provides piles of money for COVID vaccines and testing, state and local aid, more stimulus payments, and various tax changes. Here is an overview of the provisions affecting businesses. For provisions affecting individual taxpayers, see this post.

Paycheck Protection Program (PPP)

An additional $7.25 billion is allocated to the program. Not much changed in terms of eligibility. As of now, the deadline for applying is March 31st, 2021. If you’re eligible and interested now’s the time.

Extension of Family and Sick Leave Credits (FFCRA)

FFCRA is extended. This means that employers may continue to provide employees with paid sick leave through September 30th this year. Employees may receive 100% of their if they are advised to quarantine by a medical professional, are experiencing COVID19 symptoms while waiting for diagnosis, or contract COVID-19.

Though there was substantial talk about mandating employers to continue with the FFCRA, your company can elect out of these credits so long as you aren’t discriminatory about it. (Meaning you can’t tell Employee A they’re getting paid by Employee B that they aren’t.)

As a reminder, self-employed people can also stake claim to this credit. If you are unable to work due to the fact that you have COVID-19, have symptoms of COVID-19 or are forced to quarantine because of COVID-19 regulations, OR if you have a child you have to take care who is out of school/daycare because of anything related to COVID-19, you are also entitled to these credits.

Extension of the Employee Retention Credit (ERC)

This is a really big one. The Employee Retention Credit (ERC) is being extended once again, this time through December 31 of this year. Don’t count on it being extended again.

Lest you forget, 2021’s version of the ERC is available to employers that experience a decline in revenue of 20% compared to 2019 OR are at least partially shut down due to government orders. Qualifying employers receive a reimbursement of up to $10,000 of quarterly wages for each employee (capped at 70% of wages paid).

Restaurant Revitalization Fund

Restaurants are about to come into a huge boon. There will be new grants in place for the food and beverage industry that will provide businesses with revenue loss up to $10 million when comparing 2020 with 2019.

There is A LOT we don’t know about this. SBA is going to have to write rules for the program and get it set up, and if this is anything like the Shuttered Venues Operator Grants, it’s going to be a while before any restaurant gets any amount of money

Notice: This generic information is not intended to be taken as tax, legal, benefits, financial, or HR advice. Since rules and regulations change over time and can vary (by industry, entity type, and locale), consult your accountant, lawyer, and/or HR expert for specific guidance.
Scott Patterson

Scott Patterson

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