American Rescue Plan Act of 2021: Tax Policy
On March 11, 2021, President Biden signed H.R. 1319, the American Rescue Plan Act (ARPA) passed by Congress one day earlier, into law. ARPA is the sixth major COVID-19 response legislation to become law since the spring of 2020. ARPA includes several tax policy provisions relevant to employers and their employees.
Specific tax policy provisions of the new law relevant to employers include:
- Extends Employee Retention Tax Credit to December 31, 2021.
- Extends Paid Leave Credit to September 20, 2021 and increases the Credit to $12,000 (up from $10,000) per employee.
- Revokes an election that came into effect in 2021 to allow multinational companies to allocate their interest expenses on a worldwide basis.
- Expands the limitation of excessive employee remuneration by expanding the denial of deductibility currently found in IRC Section 162(m) to an additional five highest compensated individuals.
Specific tax policy provisions of the new law that may be relevant to your company’s employees include:
- Expands the Earned Income Tax Credit for childless adults.
- Increases the Child Tax Credit maximum to $3000 per child ($3,600 per child under the age of 6). From July to the end of 2021, certain taxpayers may receive monthly payments from the IRS.
- Temporarily increases the Child and Dependent Tax Credit and makes it fully refundable in 2021.
- Direct-to-Americans government-funded stimulus checks are a signature piece of ARPA. Checks in the amount of $1,400 will be provided to individuals who make up to $75,000 (phased out completely at $80,000 salary maximum). Eligible taxpayers will also receive an additional $1,400 per dependent. If a taxpayer has not filed their 2020 returns, payments will be determined using 2019 Adjusted Gross Income. The first batch of stimulus checks are expected to be delivered to eligible recipients who provided direct deposit information when filing tax returns. The White House has stated these funds could be made available within one week.
The comprehensive ARPA also addressed funding and programs related to vaccines, school re-openings, small business funding, and state and local financial support, unemployment benefits, and health insurance, among other provisions. Special recovery programs aimed at economic sectors, such as the restaurant and live events venue sectors, were also included. An overview of ARPA provided by House Democrats can be found here (PDF). A more extensive summary of ARPA provided by the law firm Holland + Knight can be found here (PDF).
PRINTING United Alliance is committed to helping the industry learn how ARPA will affect the industry and member companies, their employees, and their customers. Please see our ARPA Break Out blog posts by topic to learn more. We will continue to update member companies with details of the implementation of ARPA as they roll out in order to help the printing industry best understand the new law’s applicability and requirements. As always, PRINTING United Alliance recommends speaking with your company’s tax professionals/consultants to learn how best to apply these new provisions to assist your business.
- American Rescue Plan Act Becomes Law
- American Rescue Plan Act of 2021: Targeted Assistance to Key Print Verticals
- American Rescue Plan Act of 2021: Small Business Funding
- American Rescue Plan Act of 2021: Employee Benefits Provisions
In this article, Lisbeth addresses the American Rescue Plan Act (ARPA) of 2021. More information about ARPA can be found at www.sgia.org or reach out to Lisbeth should you have additional questions specific to how these issues may affect your business: firstname.lastname@example.org.
To become a member of PRINTING United Alliance and learn more about how PRINTING United Alliance subject matter experts can assist your company with services and resources such as those mentioned in this article, please contact the Alliance membership team: 888-385-3588 / email@example.com.
Lisbeth Lyons is Vice President, Government & Political Affairs, PRINTING United Alliance, the largest, most comprehensive graphic arts trade association in the country. With more than 20 years of experience representing the voice of business on Capitol Hill, Lisbeth advocates for public policies that protect and advance the economic future of the printing and packaging industry. She oversees PRINTING United Alliance’s legislative, political, and grassroots advocacy initiatives, and has served in executive leadership of multiple successful advocacy campaigns, such as Coalition for Paper Options, Coalition for a 21st Century Postal Service, and Stop Tariffs on Printers & Publishers Coalition.
Prior to representing PRINTING United Alliance, Lisbeth served in similar roles at Printing Industries of America, US Telecom, and the National Federation of Independent Business. She also spent three years as a K-12 teacher in the Chicago Public Schools system, where she was on the forefront of urban education reform in the mid-1990s.
Lisbeth is Midwestern born and bred, having grown up in the St. Louis metropolitan area and attended college at DePauw University in Greencastle, Indiana, before starting her career in Washington, DC. She holds a B.A. in English/Sociology and a professional graduate certificate from The George Washington University School of Political Management. She lives in the historic Logan Circle neighborhood of Washington, DC.
An avid leader and learner in professional development, Lisbeth was a founding member of the Government Relations Leadership Forum, and is an active participant in organizations such as Council of Manufacturing Associations, Women in Government Relations, and National Association of Business PACs, among others. Lisbeth is often a featured speaker at premier industry conferences; she has spoken to Boards of Directors, corporate executive management teams, and state and regional trade associations across the country from coast to coast.