The American Rescue Plan Act has been approved by Congress and is on its way to President Biden, who is expected to sign the bill by the end of the week. Key provisions of the bill include the following:
Individual tax provisions
- A $10,200 per individual unemployment insurance exclusion for the 2020 taxable year, only for households with modified AGI of $150,000 or less;
- A third round of Economic Impact Payments of $1,400 per individual and dependent (including dependents over age 17);
- 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;
- Expansion and increase of the Earned Income Tax Credit;
- Increase in the Premium Tax Credit for 2021 and 2022; and
- Six months of free COBRA benefits.
Business tax provisions
- Extension and expansion of the Employee Retention Credit;
- Extension and expansion of the employer credits for paid sick and family leave benefits;
- Credits for providing subsidized COBRA benefits; and
- Restaurant revitalization grants to cover restaurant business losses.
More details of this Act will be provided in the April issue of Spidell’s Federal Taxletter® and in Spidell’s American Rescue Plan: Tax Implications webinar (see below for more information).
To access the full text of the bill, go to: