The American Rescue Plan, 2021 (ARPA, 2021) was signed by President Biden on March 11, 2021 to address the continuing economic impact on employers and employees the coronavirus (COVID-19) pandemic has posed. The legislation extends and expands provisions found in the Families First Coronavirus Relief Act (FFCRA), Coronavirus Aid, Relief and Economic Security (CARES) Act, and the Consolidated Appropriations Act, 2021 (CAA, 2021).
The Congressional response and the federal agencies charged with providing guidance to the COIVD_19 coronavirus challenges continue to develop and change as new challenges emerge. This is a summary of only a portion of the law passed that concern the tax credit. There are many caveats to each rule and every situation is different. Please consult with counsel to determine how these changes may impact you.
This information is being provided for your review and consideration. If you have any questions or would like additional information, please don’t hesitate to contact any of the attorneys at GPNA. As more developments take place, we will post them on our website.
Paid Sick and Family Leave Credits
Changes under ARPA apply to amounts paid with respect to calendar quarters beginning after March 31, 2021. ARPA, 2021:
• Extends the FFCRA paid sick time and paid family leave credits from March 31, 2021 through September 30, 2021.
• Allows for the credits for paid sick and family leave to be structured as a refundable payroll tax credit against Medicare tax only, beginning after March 31, 2021.
• Expands the paid family leave credit to allow employers to claim the credit for leave provided for the reasons included under the previous employer mandate for paid sick time.
1. Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19
2. Has been advised by a health care provider to self-quarantine related to COVID-19
3. Is experiencing COVID-19 symptoms and is seeking a medical diagnosis
4. Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2)
5. Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19
6. Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury
• Permits the paid sick and family leave credit to be claimed by employers who provide paid time off for employees to obtain the COVID-19 vaccination or recover from an illness related to the immunization.
• Establishes a non-discrimination requirement where no credit will be permitted to any employer who discriminates in favor of certain highly-compensated employees, full-time employees, or employees on the basis of employment tenure.
• Resets the 10-day limitation on the maximum number of days for which an employer can claim the paid sick leave credit with respect to wages paid to an employee. The current 10-day limitation runs from the start of the credits in 2020 through March 31, 2021.
For the self-employed, the 10-day reset applies to sick days after January 1, 2021 for self-employed individuals.
Paycheck Protection Program Modifications
The new legislation:
• Allocates an additional $7.25 billion towards PPP funding, however, the application period has not been extended and remains March 31, 2021.
Other Relief-Related Provisions
Restaurant revitalization grants. ARPA appropriates $28,600,000,000 for fiscal year 2021 to struggling restaurants to be administered by the SBA. The money will be available until expended. Eligible entities include restaurants, or other specified food businesses, and includes businesses operating in an airport terminal. It does not include a state or local government operated business, or a company that as of March 13, 2020 operates in more than 20 locations, whether or not the locations do businesses under the same name. It also does not include any business that has a pending application for, or has received, any grant under the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act. The amount given to any business who fulfills the eligibility and certification requirements is $10,000,000 and limited to $5,000,000 per physical location of the business. Grants may be used for: (1) payroll costs; (2) mortgage payments; (3) rent; (4) utilities; (5) maintenance expenses; (6) supplies; (7) food and beverage expenses; (8) covered supplier costs; (9) operational expenses; (10) paid sick leave; and (11) any other expense determined to be essential to maintaining the business.
Shuttered venue operators. CAA, 2021 authorized grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25% reduction in revenues. ARPA appropriates $1,250,000,000, for fiscal year 2021, to help carry out these grants. The money will be available until expended. Governmental entities do not qualify.
Lisa K. Cagle
Lisa K. Cagle is an associate attorney with Gunderson, Palmer, Nelson & Ashmore, LLP in Rapid City, South Dakota. Lisa focuses her practice primarily on business and estate planning, real estate law, and employment law. Prior to practicing law, she worked as a teacher for eight years.