What employers should know about the new COVID stimulus bill
Last month Congress passed, and President Biden signed, the American Rescue Plan Act of 2021, aimed at helping businesses and workers who have struggled during the coronavirus pandemic.
Paycheck Protection Program expansion
Among other provisions in the Act, the expansion of the Paycheck Protection Program (PPP) will help small businesses stay open — and pay their employees — in the face of continued economic distress resulting from the coronavirus crisis. The original PPP dates to March 2020, but some businesses, now including more nonprofits and digital media companies, could be eligible for another loan.
Of the $50 billion allocated in the American Rescue Plan, $7.25 billion in PPP funds and $28.6 billion in grants (Restaurant Revitalization Grant Program) will be available to certain bars, restaurants, and other businesses that were forced to close during the pandemic.
“The [act] will get overdue relief to the restaurants, bars and nonprofits, as well as small businesses in Black, Latino, rural and other communities that have felt the worst economic effects of the pandemic,” said Sen. Ben Cardin, D-Md.
FFCRA and other extensions
The most significant tax credit change came earlier this year when the Families First Coronavirus Response Act (FFCRA) was updated to allow employers to continue offering covered leave through March 31. The American Rescue Act Plan further extends that through September, encouraging employees to provide leave for eligible COVID-related reasons.
Other expanded tax credits include the employee retention credit, the child tax credit for parents, and the earned income credit for low-income taxpayers.
The federal government will now subsidize 100% of COBRA premiums for laid-off employees and their covered relatives through September, removing the burden of paying for health insurance outside of the company plan.
“Employers should take swift action and work closely with their COBRA administrators to identify any eligible individuals who will need to be provided notification of the COBRA premium subsidy,” Sage Fattahian, an attorney with Morgan Lewis in Chicago, said.
Extended Unemployment Benefits
The $300 weekly supplement to unemployment is now extended through September 6, with the first $10,200 in benefits being tax-free to households earning less than $150,000.
For self-employed and gig workers who are ineligible for state unemployment, Pandemic Unemployment Assistance has been extended, as has the Pandemic Emergency Unemployment Compensation to provide more weeks of state unemployment insurance for the long-term unemployed.
For more information about the American Rescue Plan Act, contact us today.
Additional sources: SHRM