President Joe Biden signed the first Covid relief bill of his new term on March 11, 2021. The new bill, worth $1.9 trillion dollars, is the sixth passed by Congress to address the economic impact of the COVID-19 pandemic on individuals and businesses. Named the American Rescue Plan Act (ARPA), the new bill incorporates some programs from the previous coronavirus relief bills while also adding some new provisions.
Tax Credits for Employers
The ARPA offers employer tax credits for companies that voluntarily offer employees expanded family and medical leave or emergency paid sick leave through the Families First Coronavirus Response Act (FFCRA). Employers may apply for these credits between April 1 and September 30, 2021.
Employer credits are also available to companies that pay sick leave wages to an employee who is awaiting a COVID-19 diagnosis or has had exposure to someone who tested positive. An additional provision of this credit is that the employer can request the diagnostic test or medical diagnosis.
Employers who pay employees sick leave to obtain an immunization or recover from any effects of the immunization can also apply for tax credits. Lastly, employers can claim a credit if they pay Family and Medical Leave to an employee caring for a child who cannot attend in-person school due to the pandemic.
Other Small Business Provisions of ARPA
The latest Covid relief bill contains an additional $7.25 billion dollars for the Paycheck Protection Program (PPP). However, it did not originally extend the application period beyond the previous deadline of March 31, 2021.
Since the details of ARPA went public, President Biden signed an extension of the PPP. The new application deadline is May 31, 2021. Additionally, the Small Business Administration has until June 30, 2021 to process pending applications.
Other notable changes impacting the small business community include:
- Provides $15 billion in advance payments for the targeted Economic Injury Disaster Loan.
- Provides funds for businesses operating in low-income neighborhoods that have 300 employees or less and have sustained at least a 30 percent loss due to the pandemic.
- Provides a $25 billion dollar allocation for bars, restaurants, caterers, lounges, and nightclubs with less than 20 locations. The parent company cannot be a publicly-traded organization. Recipients of the Restaurant Revitalization Fund must use the money for food and beverage costs, maintenance, payroll, rent or mortgage, utilities, and paid sick leave.
- Provides a $1.25 billion dollar allocation for business owners who had to close permanently due to the pandemic.
- Provides grants of up to $10 million dollars for business entities with losses related to the pandemic. For businesses with more than one physical location, the limit is $5 million dollars per location.
Palmetto Payroll is Here to Help
Palmetto Payroll understands this is a challenging time for America’s small business owners. With new information coming out all the time, it can be difficult to know what is accurate. We invite you to schedule a consultation with us to learn more about the benefits available to you or for additional help with a business recovery plan.