

Greg and John dig into the latest updates for businesses and individuals with the American Rescue Plan Act, as well as the new options and programs available.
As businesses continue to struggle through the pandemic, Congresses continues to push for relief. As such, the American Rescue Plan Act (ARPA) was signed into law on March 11, 2021. This bill injects an additional $1.9 trillion into our economy to support unemployed workers, businesses, local governments, and our country’s effort to combat the virus. Businesses are supported through such provisions as extending the Employee Retention Tax Credit (ERTC/ERC) and the Families First Coronavirus Response Act (FFCRA), as well as adding a new grant designed to support businesses that serve food or alcohol to the public, one of the hardest hit industries in our nation. Here are the key aspects of the American Rescue Plan Act:
The Employee Retention Tax Credit (ERTC/ERC) has been extended through December 31, 2021. This provision allows businesses to continue to retain 941 liabilities and request an advance of the tax credits that exceed those liabilities by filing Form 7200 directly with the IRS on a per quarter bases. Criteria for eligibility, qualifying wages, and credit amounts remain the same, details of which can be found here. Additionally, the ARPA added a third eligibility factor for wages paid in quarters 3 and 4 2021 and a more generous application of qualified wages for large employers that have suffered a severe financial decline.
Defined as:
The Paycheck Protection Program (PPP) received an additional $7.2 billion under the ARPA and has been extended through May 31, 2021 under the PPP Extension Act of 2021. Now, businesses have an additional 2-months to apply and the Small Business Administration (SBA) has until June 30, 2021 to approve those applications. According to news sources this extension allowed an additional 190,000 businesses with pending applications to obtain their respective loans, not to mention the countless others that have not yet applied.
The CARES Act provided additional unemployment benefits to support workers during the pandemic. Pandemic Unemployment Assistance (PUA) provides unemployment benefits to self-employed, independent contractors, GIG workers, part-time workers, workers lacking sufficient work history, and workers who do not otherwise qualify for regular unemployment compensation. Federal Pandemic Unemployment Compensation (FPUC) provides an additional $300 per week in addition to the respective state’s weekly benefit. Pandemic Emergency Unemployment Compensation (PEUC) provides additional unemployment benefits to individuals who previously collected unemployment which have been exhausted. ARPA has extended these benefits through September 06, 2021 and added a new tax benefit to provide relief to those who collected unemployment in 2020.
The mandate to provide Emergency Paid Sick Leave (ePSL) and Emergency Family Medical Leave Act (eFMLA) ended December 31, 2020 but was extended, as a choice, through March 31, 2021. ARPA extended this valuable benefit once again through September 30, 2021 remaining as a choice, not a mandated benefit, providing tax credits to those employers who use it. ARPA also expanded the qualifying reasons, reset the 10-days for ePSL, modified eFMLA, and added a non-discrimination rule.
Provides tax credits for ePSL and eFMLA for all previous 6 reasons PLUS the following:
Undoubtedly the food and beverage industry has been decimated during this pandemic. From state and local mandated closures or partial closures, to articles indicating restaurants and bars as a likely source of virus contraction, it’s no wonder they’re struggling. As a result, the Restaurant Revitalization Fund (RRF) was established under the ARPA providing grants to our favorite eateries and watering holes.
Losing a job or having one’s hours cut is stressful enough, but trying to maintain health insurance under COBRA is downright painful. The option to continue coverage is certainly welcomed, but often cost prohibitive since an employee must pay the full monthly premium PLUS a COBRA administration fee, often about 2%, above the monthly premium cost. Insurance costs often top the list of an employee’s largest monthly expense and trying to pay those costs when one is unemployed or underemployed often forces them to decline the continuation of coverage. Since the high infection rate of COVID makes maintaining health coverage even more important, ARPA has provided a solution for assistance eligible individuals (AEI) that employers must understand.
An AEI is defined as an individual who is eligible for Federal COBRA or comparable state continuation program from 04/01/2021 – 09/30/2021 due to an involuntary termination of employment, other than gross misconduct, or reduction in hours
Provides a 100% tax credit (including the COBRA admin fee) against the employer’s Medicare for those AEIs who were involuntarily terminated, other than gross misconduct, or who had a reduction in hours
Extension of election period:
ARPA added additional disclosure requirements with respect to COBRA as it pertains to assistance eligible individuals:
Federal tax treatments of loans and grants may not be applicable at your state level. Consult with a tax professional for state specific taxation.
If you are applying for any government grant, consider obtaining a D-U-N-S and SAM number prior to doing so, even if it does not explicitly indicate to do so. Both numbers are designed to obtain government contracts AND grants.
Many states and municipalities are providing grants and/or loans to support small business needs during the pandemic. Consult with your local Small Business Development Center (SBDC) for local support in your area.
https://www.irs.gov/forms-pubs/about-form-7200
https://www.cbsnews.com/news/ppp-extension-law-deadline-may-31/
https://www.dol.gov/coronavirus/unemployment-insurance
https://www.dol.gov/sites/dolgov/files/WHD/pandemic/ffcra-employee_paid_leave_rights.pdf
https://www.uschamber.com/co/run/business-financing/restaurant-revitalization-fund-grants-guide
https://www.jdsupra.com/legalnews/employers-here-s-your-quick-hitter-2814775/