The highly debated $1.9 trillion American Rescue Plan has come to fruition. President Biden is scheduled to sign the bill on Friday. What does that mean for businesses and individuals?
- Restaurant Revitalization Grant – Up to $5 Million per physical location, $10 Million total. The first 21 days of the program will be reserved for small businesses owned and controlled by women, veterans, or economically and socially disadvantaged persons.
- Targeted EIDL advances – An additional $5,000 is available to business with 10 or less employees who suffered an economic loss of greater than 50%.
- Targeted EIDL advances and Restaurant Revitalization Grants are not taxable and expenses paid with proceeds are tax deductible.
- Credits for Sick Leave – extended to wages paid after March 31, 2021 through September 30, 2021.
- Credits for Family Leave – extended to wages paid after March 31, 2021 through September 30, 2021.
- Employee Retention Credit – extended to wages paid after June 30, 2021 and before January 1, 2022.
- Paycheck Protection Plan (PPP) – eligibility expanded for additional not-for profit organizations.
- Stimulus Payments – $1,400 per individual and $1,400 per dependent to be distributed immediately. Income limitations apply.
- Exempts $10,200 of Unemployment Compensation from Federal Tax for 2020. Income limitations apply.
- Increased Child Tax Credits beginning in the 2021 tax year – $3000 per child ages 7 to 17; with an additional $600 for children age 6 and under.Income limitations apply.
- Increased Dependent Care Tax Credit – $8,000 for 1 qualifying dependent ($16,000 for 2 qualifying dependents). Credit phases out when Adjusted Gross Income exceeds $400,000.
- Employers may provide tax free dependent care assistance up to $10,500 through December 31, 2021.
The new law is 628 pages and contains many new provisions. Please reach out to your Somerset advisor to determine how the above highlights and other provisions may benefit you. 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 email@example.com.