President Biden’s first legislative priority was a pandemic relief bill, the American Rescue Plan Act of 2021 which was signed into law on March 11, 2021.
Portions of the bill most relevant to PPS in the enacted legislation are:
-An additional $7.25 billion to be disbursed through the PPP program (which expires on March 31, 2021).
-Targeted Economic Injury Disaster Loan (EIDL) Advance program
-Provides emergency grants of $5000 to small businesses with fewer than 10 employees and located in low-income communities that have suffered more than 50% economic loss.
-EIDL Advance funds (for both individuals and S corps) shall not be taxable as gross income and no deductions related to those funds shall be denied due to its non-taxable status.
-Extension of the existing paid sick and paid family leave tax credit (100% refundable for those with fewer than 500 employees) through September 31, 2021.
-Employee retention tax credit (ERTC):
-Small businesses with fewer than 500 employees can elect for any calendar quarter to receive an advance payment of the ERTC of up to 70% of the average quarterly wages paid by the employer in calendar year 2019.
-This new policy applies to wages paid between July 1, 2021-December 31, 2021.
-Full $1,400 for individuals with an adjusted gross income (AGI) of up to $75,000, that amount is phased out at an AGI of $80,000; limits are doubled for couples. Heads of households will also receive $1,400 but the income thresholds are different; the phaseout will begin at an AGI of $112,500 and be capped at AGI of $120,000.
-Each child and adult dependent (including disabled adults and college students who weren’t eligible for the first two rounds of checks) would also be eligible for the full $1,400/person.
-Extend supplemental unemployment benefits at the current amount of $300/week until September 6, 2021.
-The first $10,200 in unemployment assistance will be tax-free for individuals with adjusted gross incomes under $150,000 beginning in tax year 2020.
- A temporary boost to income-based subsidies for customers using the Affordable Care Act’s Marketplace exchanges; this is intended to enable more people to purchase private health insurance. For 2021 and 2022:
-A sliding scale of maximum percent of income that can be charged for health insurance premiums from 0 to 8.5%.
(Table from American Rescue Plan Act, pp.462)
-Those making up to 150% above the federal poverty level can have their health insurance fully subsidized if they purchase it through an ACA Exchange.
-Premium assistance to cover 100% of COBRA costs for eligible individuals and families through September 30, 2021.
Not included in the legislation:
-No additional money for the Provider Relief Fund
-The deadline for the return of the 2% sequestration was not extended (currently set to return on April 1, 2021)