On Wednesday, the House passed the Senate Amendment to H.R. 1319 – the America Rescue Plan Act of 2021. This bill was passed through the budget reconciliation process and is the fifth COVID-19 relief bill passed by Congress since the start of the pandemic, last year. The bill authorizes $1.9 trillion of federal spending. The following provisions were included in the final bill:
Extended Voluntary Paid Sick Leave Tax Credit – This bill extends the voluntary paid sick leave tax credit provision of The Families First Coronavirus Response Act (FFCRA) through September 30, 2021. The provision also “resets” the 10-day sick leave period after March 31, 2021. This extension contains technicalities in how it is structured; employers will now be required to file a Form 7200 to receive the credit going forward.
COBRA Subsidies – The federal government will subsidize 100 percent of premiums for qualifying individuals eligible to receive COBRA coverage. Employers and plans will be able to claim a refundable tax credit against the Medicare payroll tax liability for the cost of these premiums.
Multiemployer Pension Relief – Under this legislation, much needed relief will be provided to endangered multiemployer pension plans. Key points to the multiemployer relief language are as follows:
- Qualifying plans can retain their funding zone status for plan years that begin in 2020 or 2021. A plan in endangered or critical status would not have to update its plan or schedules until the plan year beginning March 1, 2021.
- Plans in endangered or critical status would be able to extend their rehabilitation period by five years giving plans more time to improve their status through various measures.
- Creation of a Special Financial Assistance Program for critical and declining status plans through lump sum payments by the PBGC. The legislation includes numerous qualifying characteristics to receive this support, much of which will need to be clarified by regulatory language.
Extended Employee Retention Tax Credit (ERTC) – The ERTC was extended to apply to the third and fourth quarters of 2021. The amount of the credit remained the same as what was enacted by the Consolidated Appropriations Act (H.R.133) on Dec. 27, 2020; effective Jan. 1 through June 30, employers are allowed a 70% credit for qualified wages up to $10,000 per quarter per employee. Generally, businesses that experience a 20% year-over-year decline in gross receipts are eligible for the credit.
Pandemic Unemployment Assistance (PUA) – The bill extends the PUA at $300 a week through September 2021.
Economic Impact Payments – The Department of the Treasury will issue direct stimulus payments of $1,400 for individuals, payments will be phased out completely at $80,000 for individuals and $160,000 for joint filers.