What the $1.9 Trillion COVID-19 Relief Bill Means for Your Business
Congress officially passed the American Rescue Plan (ARP) to provide assistance to individuals and businesses struggling due to COVID-19. This $1.9 trillion bill, expected to be signed on Friday, March 12 by President Biden, will be one of the largest stimulus packages in US history, providing broad-based aid to state and local governments, and hard-hit industries and communities. How will this benefit your business and employees?
Unemployment Insurance
A $300 per week federal “jobless aid supplement,” in addition to states’ unemployment benefits, will be extended through September 6, 2021. The benefit will also provide a tax exclusion from the first $10,200 of unemployment compensation received by individuals during 2020.
Paid Sick and Family Leave
While this bill will not make the paid leave mandatory again, it will continue to provide a tax credit that was established through the Families First Coronavirus Response Act (FFCRA) to employers who voluntarily choose to offer the paid leave benefit to employees. This benefit is now extended through September 30, 2021, and it is expanded to include:
- Additional following qualifying reasons to take leave, including:
- The employee is obtaining immunization (vaccination) related to COVID-19;
- The employee is recovering from any injury, disability, illness, or condition related to such vaccination; or
- The employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
- Non-discrimination rules to provide that no tax credit is available if the employer, in determining the availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision appears designed to compel employers who make the decision to voluntarily provide leave to do so in a uniform manner, without discriminating against certain categories of workers.
- Re-setting the 10-day limit for the tax credit for paid sick leave under the FFCRA beginning April 1, 2021. As a result, an employer could voluntarily provide an additional 10 days of FFCRA paid sick leave beginning April 1, 2021, and would be eligible for a tax credit for doing so.
Stimulus Checks
Yes, another round of stimulus checks is coming. Checks up to $1,400 will be sent out to Americans, depending on their income; this includes individuals who make less than $75,000 per year, along with single parents that earn less than $112,500 per year and couples that bring in a total of less than $150,000. Families can get an additional $1,400 per child.
Small Businesses
$15 Billion will be used towards the Emergency Injury Disaster Loan Program and $7 billion to the Paycheck Protection Program. There will also be an additional $25 billion for a new funding program, specifically for bars and restaurants.
Vaccines
The bill accounts for $20 billion to go towards the manufacturing and distribution of COVID-19 vaccines, as well as $50 billion towards testing and contract tracing.
Child Tax Credit
The child tax relief credit will be extended for one year. It will also increase to $3,600 for children under 6-years-old and to $3,000 for children between the ages of 6-years-old and 17-years-old. Both of these cases will be an increase from the current $2,000 per child under 17-years-old credit.
Housing Aid
$20 Billion will go towards state and local governments in order to help cover rent and utilities for low-income households, and another $10 billion is earmarked to help struggling homeowners pay mortgages, utilities, and property taxes.
The expansion of the Paid Sick and Family Leave is particularly pertinent to small-mid-sized businesses and their employees, particularly as the virus continues to spread. For assistance understanding and administering this benefit, please contact us.
