The House-passed legislation, the “American Rescue Plan Act” (the “Bill”), is expected to be considered by the Senate this week. The Bill includes provisions to provide financial relief to struggling families and ramp up vaccination distribution across the country. Some of the major provisions included in the Bill are:
Child tax credit
The Bill will modify a refundable child tax credit for the tax year 2021, increasing the amount to $3,000 per child from $2,000. The credit amount will be $3,600 for children under the age of 6.
The Bill includes the third stimulus payment, equal to $1,400 per person, to individuals with an AGI of $75,000 (or $150,000 for married couples) or less.
The Bill extends unemployment programs through August 29, increasing federal payments from $300 per week to $400.
Child and dependent care credit
The Bill makes changes to the Section 21 child and dependent care credit, including making it refundable for 2021.
Family and sick leave credits
The credits for sick and family leave enacted by the Families First Coronavirus Response Act would be extended to September 30, 2021. It increases the limit on the credit for paid family leave to $12,000.
Employee retention credit
The Bill extends the employee retention credit through the end of 2021. This credit allows eligible employers to claim a credit for paying qualified wages to employees.
Tax exempt EIDL grants
The Bill provides that EIDL grants received from the US SBA are not included in gross income and that this exclusion from gross income will not result in a denial of a deduction.