On Thursday of last week, President Joe Biden signed the $1.9 trillion coronavirus relief package, entitled the New American Rescue Plan Act, into law. It was created to help the financial hardships brought on by COVID-19. The bill is geared to help individuals as well as businesses.
Below are some of the main provisions in the bill.
Individual tax provisions
- A $10,200 per individual unemployment insurance exclusion for the 2020 taxable year, only for households with modified adjusted gross income (AGI) of $150,000 or less. Those who have already filed returns reporting 100% of their unemployment will need to supersede or change their returns to get a refund.
- The third round of Economic Impact Payments of $1,400 per individual and dependent (including dependents over age 17).
- Extension of Pandemic Unemployment Assistance until September 6 with a $300 increase.
- Increased and fully refundable Child Tax Credits and Dependent Care Assistance Credits for the 2021 taxable year.
- An increased employer-provided dependent care assistance exclusion.
- A five-year COD exclusion for student loan forgiveness.
- An expansion and increase of the Earned Income Tax Credit.
- Tax relief for excess advanced Premium Tax Credits received in 2020, and an increase in the Premium Tax Credit for 2021 and 2022.
- Six months of free COBRA benefits.
Business tax provisions
- Extension and increase of the Employee Retention Credit.
- Extension and increase of the employer credits for paid sick and family leave benefits.
- Credits for providing subsidized COBRA benefits.
- Restaurant recovery grants to cover restaurant business losses.
To access the full text of the bill, go to:
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