This week the Congress Budget Committee passed the American Rescue Plan, otherwise know as the Biden Administration’s $1.9 trillion stimulus bill.
The House is expected to pass the bill tomorrow, and then it will move to the Senate. As of now, the bill is expected to become law before March 14th with substantially all or almost all of the provisions in place.
While there is a lot to unpack in the almost 600 page bill, the following are highlights based on what we know at this point:
- The Families First Coronavirus Response Act credits are extended from March 31stto September 30th. These credits are expanded to include time off for COVID vaccinations and time off due to side effects of the vaccine. Employer paid time off for COVID related absence continues to be mandatory for Q2 and Q3 of 2021. The COVID related paid time off hours reset for employees beginning April 1, 2021.
- The bill expands Targeted Economic Injury Disaster Loan (EIDL) Advances for businesses with an economic loss of greater than 50% and 10 or fewer employees. The bill provides for a supplemental advance of $5,000. The Targeted EIDL Advance will not be included in taxable income of the recipient and related expenses paid with funds will be deductible.
- The Paycheck Protection Program (PPP) is expanded to include additional non-profit entities with additional funds appropriated to the program for these purposes.
- The bill creates a Restaurant Revitalization Fund which will provide grants to restaurants. Similar to the PPP, there will be required certifications, including a necessity certification, that must be made in order to obtain the grant. The first 21 days of the fund are set aside for small business concerns controlled by women, veterans or the socially and economically disadvantaged. The grants are limited to $10M; $5M per physical location and are calculated based on the pandemic-related revenue loss of the eligible entity. The grant can be used for expenses similar to the PPP program, with notable additions such as maintenance expenses, construction to accommodate outdoor seating, walls, floors, fixtures, supplies, food and beverage costs, supplier costs, operational expenses, etc.
- The bill includes an additional $1,400 recovery rebate per eligible person. These amounts will be phased out based on adjusted gross income.
- The bill increases the child tax credit to $3,000 ($3,600 for qualifying children under age 6) for the 2021 tax year. However, the bill reduces the phase-out based on adjusted gross income. Under current law, the credit started to phase out for married filing joint taxpayers at $400k of adjusted gross income. This bill reduces the start of the phase-out for married filing joint taxpayers to $150k.
Somerset will continue to monitor this bill and will provide additional information as it is available. If you have questions about how these provisions might impact your particular circumstances, please reach out to your Somerset advisor. If you don’t work with Somerset yet, now is a great time to get acquainted! Please reach out to us at 317.472.2200 or .