On Wednesday, March 10th the House of Representatives gave final approval to a massive $1.9 trillion coronavirus bill by a near party-line vote of 220-211. One Democrat, Jared Golden of Maine, voted with Republicans against the bill. The 628-page bill, which Democrats have named the American Rescue Plan Act of 2021 (H.R.1319), was approved by the Senate by a vote of 50-49 last week. President Biden has promised to sign the bill into law.
Highlights for NEFI members and supporters can be found below. As always, consult with an attorney or qualified tax professional regarding how this legislation may impact your business.
Coronavirus Sick Leave: The bill does not reinstate the mandate that employers provide coronavirus sick and family medical leave as originally proposed by President Biden. It does, however, extend through September 30, 2021 the existing tax credit for qualified leave that is provided voluntarily by an employer. It also expands the tax credit to include leave for vaccination and dealing with related side-effects.
Employee Retention Tax Credit: The Employee Retention Credit (ERTC) is extended for six months beginning July 1, 2021 and expanded to provide even greater tax benefits for certain qualified businesses.
No Major PPP Changes: The Paycheck Protection Program (PPP) is expanded to include certain nonprofits and $7.25 billion is provided for this purpose. Congress opted against extending the March 31 deadline to apply for forgivable first and second-draw PPP loans. 42 percent of the $284 billion provided by Congress in the previous relief bill remains available for new loans. Banks are pressing the Biden administration to extend the program and allow struggling businesses additional time to obtain relief.
Targeted EIDL Advance Grants: $15 billion is provided for Economic Injury Disaster Loan (EIDL) Advance Grants of up to $10,000 for the hardest-hit small businesses in low-income communities. Like the SBA advance grants provided under the CARES Act last year, these funds will not need to be repaid.
Emergency Fuel Assistance: Provides $4.5 billion in emergency fuel assistance to states through the federal Low-Income Home Energy Assistance Program (LIHEAP). These funds will remain available through September 30, 2022 and are in addition to $3.75 billion in regular appropriations for Fiscal Year 2021, for a total of $8.25 billion. Click here to see how much fuel assistance your state will receive.
Unemployment Benefits: The weekly $300 “bonus” federal unemployment compensation is extended through September 6, 2021. The bill also provides unemployed workers a continuation of COBRA benefits through September 30, 2021 at no cost to them (an employer tax credit is provided).
No Minimum Wage Increase: The bill does not include a proposal to increase the federal minimum wage to $15. The Senate parliamentarian ruled it conflicts with budget rules and it was removed.
The bill includes numerous provisions that may help families and individuals meet living expenses. Funding for the rental assistance program created in the previous relief bill is nearly doubled and $10 billion is provided for a new homeowner assistance program. Home energy costs are considered eligible expenses under both programs. The bill sends another $1,400 stimulus check to Americans but lowers income eligibility from $100,000 to $75,000 for individuals and from $200,000 to $150,000 for joint filers. The Child Tax Credit for qualifying families is temporarily increased from $2,000 to $3,000 (or $3,600 for children under 6 years old).
Congress is now expected to turn its attention to “phase 2” of President Biden’s economic stimulus plan, a major infrastructure and workforce development bill. While details are yet to be revealed, energy and climate policies and tax reform proposals may be on the table.