On March 11, President Biden signed the American Rescue Plan Act of 2021 into law. The $1.9 trillion “ARP” is different than the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act that passed with bipartisan votes in March 2020 and initiated the Paycheck Protection Program (PPP) and new tax breaks. Aside from targeted financial programs for restaurants and live venues, the ARP doesn’t feature much in the way of direct support for business.
Employer provisions mostly concern paid sick and/or family leave for employees that had been required by the Family Friendly Coronavirus Relief Act (FFCRA) through 2020, with the ARP extending the tax credit for employers that voluntarily provide this leave. Then-President Trump signed legislation in late 2020 allowing employers to voluntarily offer FFCRA leave in exchange for the tax credit through March 2021, and the ARP expanded why employees can use this leave and the ability to use it a second time if voluntarily provided by their employer. In return, the FFCRA’s tax credit to reimburse employers for 100% of the cost is now available through Sept. 30, 2021.
The ARP also extends the $300 federal weekly supplement to state unemployment insurance benefits through Sept. 6, 2021; provides a third round of Economic Impact (stimulus) Payments up to $1,400 to most adults; and expands the Child Tax Credit and Child and Dependent Care Tax Credit. But perhaps the biggest benefit for companies is the Employee Retention Credit, which is extended through 2021 and allows eligible businesses to offset qualified wages by up to $7,000 per employee per quarter.
Separate from the ARP, the Small Business Administration is modifying its COVID-19 Economic Injury Disaster Loan (EIDL) program. On March 15, the SBA extended deferment periods for all disaster loans until 2022. Thus, all SBA disaster loans made in 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note, and loans made in 2021 will have a first payment due date extended from 12-months to 18-months from the date of the note. Also, on March 24, the SBA increased the maximum amount that small businesses can borrow through its COVID-19 EIDL program starting the week of April 6, 2021.
Finally, on March 25, the Senate voted 92 – 7 to pass the PPP Extension Act of 2021, which had been approved by the House and extends the program’s application period by two months until May 31. In addition, the bill gives the SBA an extra month through June to process loans after the PPP application period closes.