March 18, 2021--On March 11, President Biden signed the $1.9 trillion American Rescue Plan (ARP) into law. Like previous covid relief packages, the ARP allocates significant sums to American businesses, both large and small. Specifically, the bill contains almost $107 billion in direct relief to businesses and additional, significant appropriations for various employer tax credits. The remaining $1.8 trillion, however, will support direct assistance to Americans, augmented social programs, and vaccine distribution.
Although the ARP mainly directs funds to existing pandemic programs, it does create a few new ones, including $4 billion in debt relief for farmers of color, the Restaurant Revitalization Fund and the Child Care Stabilization Fund. The Restaurant Revitalization Fund contains $28.6 billion in grants to distressed bars, restaurants, and caterers. Likewise, the Child Care Stabilization Fund directs $24 billion to child care providers.
Additionally, the ARP also creates a second Payroll Support Program. This program will receive $3 billion to distribute payroll grants for aviation manufacturers, who were left out of the original Payroll Support Program for airlines and airline contractors.
Expansions to Old Programs
The ARP delivers additional funding to small businesses through the Paycheck Protection Program (PPP), which received $7.25 billion in fresh funds, and the Economic Injury Disaster Loan (EIDL) Program, which received $15 billion to continue to make emergency advance grants. The ARP also made minor changes, the effects of which expanded PPP eligibility for distressed nonprofit organizations and online news publishers.
The ARP also allocates an additional $1.25 billion for Shuttered Venue Operators Grants, bringing total program funding to $16.25 billion since its inception last March. Meanwhile, the Payroll Support Program for air carriers and airline contractors received an additional $15—$14 billion air carriers and $1 billion for contractors. To date, $64 billion has been appropriated to the Payroll Support Program.
The Provider Relief Fund, which offers grants to health care providers impacted by the pandemic, received $8.5 billion in supplementary funding through the ARP. Although the previous $178 billion allocated to the Provider Relief Fund was distributed to a variety of health care providers, these new funds are earmarked for rural providers only.
Direct Aid to Businesses through the American Rescue Plan
Under the previous stimulus package, employee retention tax credits were set to expire in June. The ARP has extended that credit through the rest of the year, allowing businesses to claim a maximum of $28,000 in refundable credits for employee wages and benefits in 2020.
Moreover, tax incentives for paid family leave and paid sick leave have been extended through September, but employers are no longer required to offer such leave. Employers are still eligible for up to $200 or $511 in sick leave tax credits per day, although the amount of the credit depends on the reason that an employee has taken leave. The maximum annual paid family leave credit, however, has been raised from $10,000 to $12,000.