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March 11, 2021
The Apex Benefits team has dug into the language of the $1.9 trillion American Rescue Plan, which was passed into law Thursday by President Biden.
Highlights of the bill include:
Extending tax credits for employers who voluntarily provide FFCRA leave to Sept. 30, 2021
Extension of the weekly $300 unemployment benefit through Sept. 6
Funding of $130 billion for K-12 schools to safely reopen
$7.25 billion in funding for the Paycheck Protection Program (PPP)
We break down several aspects of the bill:
Extension of FFCRA Tax Credits
The federal Families First Coronavirus Response Act (FFCRA) expired on December 31, 2020 – and companies no longer were required to offer emergency paid sick leave and emergency paid family leave. Congress extended the tax credit for employers who voluntarily continued to provide such paid leave through March 31, 2021.
The House version of the COVID-19 relief bill does not extend the employer obligation to provide paid leave. Instead, the legislation extends the tax credit for voluntary provision of leave through September 30, 2021 and makes related changes. :
- Extends the tax credits available for employers who voluntarily provide FFCRA leave to September 30, 2021.
- Provides that the tax credits are available for paid sick leave and paid family leave provided for the additional following qualifying reasons:
- the employee is obtaining immunization (vaccination) related to COVID-19;
- the employee is recovering from any injury, disability, illness or condition related to such vaccination; or
- the employee is seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 (or their employer has requested such a test or diagnosis).
- Adds non-discrimination rules to provide that no tax credit is available if the employer, in determining availability of the paid leave, discriminates against highly compensated employees, full-time employees, or employees on the basis of tenure with the employer. This provision appears designed to compel employers who make the decision to voluntarily provide leave do so in a uniform manner, without discriminating against certain categories of workers.
- Resets the 10-day limit for the tax credit for paid sick leave under the FFCRA beginning April 1, 2021. As a result, an employer could voluntarily provide an additional 10 days of FFCRA paid sick leave beginning April 1, 2021 and would be eligible for a tax credit for doing so. But employers are not required to do so.
- The government pays the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either.
- The package extends the existing $300 weekly unemployment benefit through Sept. 6, as well as provides a tax break on $10,000 in unemployment benefits.
- The bill would send $1,400 stimulus checks on top of the $600 payments issued through the stimulus bill passed in December.
- Individuals earning $75,000 per year and couples earning $150,000 would still receive the full $1,400-per-person benefit. However, the benefit would disappear for individuals earning more than $80,000 annually and couples earning more than $160,000.
- Almost $130 billion is to help K-12 schools reopen. That money goes toward improving ventilation systems, reducing class sizes, buying personal protective equipment and implementing social distancing.
- Colleges and other higher-education institutions receive almost $40 billion. That money supports financial aid grants to prevent hunger, homelessness or other challenges for students during the pandemic.
- Additional funds for child-care providers through the Child Care and Development Block Grant program. The bill also sets aside $1 billion for the Head Start program, which provides early-childhood education, health and nutrition services to low-income children and families.
Small Business Assistance
- Economic Injury Disaster Loan program has $15 billion in funding.
- New grant program for bars and restaurants, specifically $28 billion.
Paycheck Protection Program (PPP)
- $7.25 billion in additional funding for the Paycheck Protection Program (PPP), a pandemic relief fund that provides forgivable loans to struggling small businesses.
- Nonprofit organizations are eligible to receive a PPP loan if the nonprofit employs 500 or less employees per physical location of the organization, if the nonprofit does not receive more than 15% of its receipts from lobbying activities including other stipulations.
Child Tax Credit
- Most Americans would receive $3,000 a year for each child ages 6 to 17, and $3,600 for each child under 6.
- The provision in the bill lasts one year and is sent via direct deposit on a “periodic” basis. It is a major expansion of the existing child tax credit, which provides $2,000 a year for children from birth through age 16.
- The more regular payments are intended to help offset costs families face day-to-day, instead of sending families one annual payment.
- Tens of billions of dollars will fund coronavirus testing and contact tracing; increasing the size of the public health workforce and funding vaccine distribution and supply chains.
- This week, Biden said there will be enough coronavirus vaccine doses for “every adult in America” by the end of May — a two-month acceleration of his previous projection of July.
- More than $20 billion in emergency rental assistance and other relief for the homeless.
- Another $10 billion goes to mortgage and homeownership assistance.
Aid for multi-employer pension plans
- $86 billion bailout for failing pensions.
- Adds $8.5 billion in funds for the Provider Relief Program to assist rural health care providers.
- Provides $510 million for the FEMA Emergency Food and Shelter Program. That money supports homeless services providers for overnight shelter, meals, one month’s rent and mortgage assistance, and one month’s utility payments.
- Expands the Employee Retention Tax Credit for start-up companies and other businesses hit by the pandemic.
- $10 billion infrastructure program to help local governments continue crucial capital projects.
- All coronavirus-related student loan relief tax-free.
- Increases the total amount of Amtrak relief funding by $200 million.
- Sets aside $1.25 billion for summer enrichment; $1.25 billion for after-school programs and $3 billion for education technology.