Key Takeaways: American Rescue Plan Act

On March 11, 2021, President Biden signed into law the American Rescue Plan Act, which provides $1.9 trillion in relief funds. For some small businesses, it will provide much-needed relief from the financial effects of the pandemic.

Here are some of the key provisions from the bill that may impact your Hawaii businesses. For a deep dive into the topic, please also see More Economic Relief; Part One: Unpacking the American Rescue Plan. 

Relief for Small Businesses

• Paycheck Protection Program (PPP)
  • An additional $7.25 billion for the PPP and expansion to include larger nonprofits and online-only news outlets, both previously excluded from the PPP. With the passage of the PPP Extension Act, the deadline to apply has been extended from March 31 to May 31, 2021.
• Economic Injury Disaster Loan (EIDL) Advance Program
  • An additional $15 billion to the Emergency Injury Disaster Loan program. Severely impacted small businesses with fewer than 10 workers will be given priority for some of the money.
• SBA Assistance for Restaurants and Bars, and Shuttered Venue Operators
  • $28.6 billion for a new grant program specifically for bars and restaurants. Eligible businesses may receive up to $10 million and can use the money for a variety of expenses, including payroll, mortgage and rent, utilities, as well as food and beverages.
  • An additional $1.25 billion for the SBA Shuttered Venue Operators Grant (SVOG) Businesses may apply for both a venue grant and PPP loan.
• State Small Business Credit Initiative (SSBCI)
  • $10 billion through a reauthorized State Small Business Credit Initiative program, providing flexible, affordable capital and technical assistance to help small businesses apply for various support programs, and allocated funds to pay reasonable costs of administering the program.
• Community Navigator Program
  • $100 million for a Community Navigator Program targeted towards small businesses in underserved and underbanked communities with an additional $75 million for outreach and education.

Tax Credits and Benefits

• Employee Retention Tax Credit
  • Expands the Employee Retention Tax Credit through the end of 2021. Eligible businesses may count all wages as qualifying wages, not just wages paid to employees not providing services. It also expands the credit to some startups.
• Employer Paid Leave Credit
  • Expands the employer-paid leave credit from $10,000 per employee to $12,000 and extends the tax credits available for employers who voluntarily provide FFCRA leave from March 31, 2021 to September 30, 2021. The credits may also apply to employee time off to get a COVID-19 vaccine and to recover from its side effects.
• COBRA
  • Provides for a 100% COBRA premium subsidy effective April 1 through September 30, 2021, for those who are involuntarily terminated and want to remain on their employer’s health insurance. The employer would pass along the subsidy so that qualifying individuals would pay nothing for their COBRA coverage during this period.
• Miscellaneous Tax Provisions
  • Exempts both the SBA EIDL targeted advances and the restaurant grants from taxation.

Have a question for our HR experts?  Contact simplicityHR to learn more about the advantages of having our team of professionals on your side as you navigate the American Rescue Plan Act.

This article is for informational purposes only and does not constitute legal advice. Readers should first consult their attorney, accountant, or adviser before acting upon any information in this article.