The American Rescue Plan Act of 2021 (ARPA), signed into law on March 11, 2021, brought with it a series of critical updates to current relief assistance programs and previously enacted COVID-19 legislation. For those business owners who took advantage of the many Small Business Administration (SBA) loan programs, like the Economic Injury Disaster Loan (EIDL), and Families First Coronavirus Response Act (FFCRA), the deferred timelines and eligibility expansions can seem confusing.
Here are the big take-aways:
SBA Loans and EIDL (excluding the Paycheck Protection Program)
- The first payment due date for any disaster loans made in calendar year 2020 will be deferred from 12-months to 24-months from the date of the note.
- The first payment due date for any disaster loans made in calendar year 2021 will be deferred from 12-months to 18-months from the date of the note.
- Principal and interest payments on existing disaster loans approved prior to 2020 that were in regular servicing status as of March 1, 2020, will be deferred for a third time. Loan recipients will now resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment.
- Interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
- The tax credit will now be available to qualified employers (500 employees or less) through September 30, 2021.
- Providing FFCRA leave benefits is voluntary, not mandatory. Qualified employers may choose to provide coverage under the emergency paid sick leave (EPSL), the emergency and family medical leave (EFML) or both.
- Qualified employers who voluntarily provide leave can receive tax credits for qualified wages paid to employees from March 31, 2021 through September 30, 2021.
- The qualifying uses for the tax credit has expanded to include time off while waiting for COVID-19 test results, receiving the COVID-19 vaccine, or injury/illness from the COVID-19 shot.
- The full 12 weeks of EFML is now paid. The two-week unpaid provision no longer exists.
To learn more about how ARPA has effected the employee retention tax credit, please read our article on the updates to the Employee Retention Credit.
These updates merely skim the surface of all the ARPA entails. As with any major piece of legislation, we are still waiting for additional guidance. Do not hesitate to contact a member of our tax team with any questions you may have regarding these updates and how they may affect your business. We will update this article as soon as more information becomes available.