COVID-19 Relief: An Overview of the New American Rescue Plan Act

Mar 26, 2021 | Tax & Accounting

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:
https://www.whitehouse.gov/briefing-room/legislation/2021/01/20/president-biden-announces-american-rescue-plan/

If you have any questions on this or any other topics, please call us at 818.954.9700 or send us an email at info@twhc.com.

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