What do You Need to Know?---American Rescue Plan Act 2021

The American Rescue Plan Act was signed into law on March 11, 2021 and contains features that are designed to help employers recover from the pandemic.  Features of the Act include;
 
·       The Employee Retention Tax Credit (ERTC), which was created in the CARES Act and provides tax relief for employers on employee wages, has been extended from June 30th to the end of the year. Hardest hit employers may count all wages paid as qualifying wages, not just the wages paid to employees that are not providing service.  The extension of two additional quarters translates to up to an additional $14,000 in savings per employee. More assistance under the ERTC has been included in the Act.
·       The paid leave tax credit created in the Families First Coronavirus Response Act (FFCRA) has also been extended, from March 2021 to the end of September. As of April 1, 2021, employers are eligible for an additional tax credit if they voluntarily provide an additional 10 days of paid sick leave and an additional 10 weeks of paid family leave. The limit on the size of the tax credit has been increased to $12,000.
·       In addition, new qualifying reasons for FFCRA paid leave have been added, mostly related to COVID-19 vaccines, such as an employee;

• Is awaiting a diagnosis,
• Will be receiving immunization from COVID-19, or
• Is recovering from any complications related to the immunization
• Revisions to Unemployment were included in the Act.
  • Provides 53 weeks of federal unemployment benefits after the state benefits end, up from 24 weeks
• The federal supplement to unemployment remains at $300 a week
  • A new provision exempts $10,200 of unemployment benefits received in 2020 from income taxes. It is retroactive, applying to unemployment insurance benefits received last year and only applies to individuals with incomes below $150,000. 

The above topics only cover general information of the provisions under the American Rescue Plan Act 2021.  If we can provide more information, contact us at [email protected]
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