Significant Tax Provisions from Biden’s American Rescue Plan Act

rescue american plan act

Richard A. Huffman, CPA, MST

Tax Partner


The American Rescue Plan Act signed into law by President Biden includes the following significant tax provisions:

Business tax provisions:

  • Family and sick leave credits – Extends tax credits through 9/30/21.
  • Employee retention credit – Extended through 12/31/21, program criteria as follows:
  1. To qualify experienced a full or partial suspension of business operations due to COVID-19 governmental orders or incurred at least 20% decline in quarterly gross receipts as compared to the 2019 year quarter.
  2. Main benefits for employers with up to 500 full-time employees (limited benefits for employers with more than 500 employees).
  3. Credit is 70% of up to $10,000 per employee per quarter qualified wages claimed against employer payroll taxes.
  4. Additional information available at the following IRS website
  • Restaurant revitalization grants – Businesses that serve food or drink as its primary purpose will be eligible for grants that will match their pandemic-related revenue loss calculated by comparing the reduction in 2020 revenue as compared to 2019.
  • COBRA continuation coverage – Continuation coverage premium assistance credit applied to premiums and wages through September 30, 2021.

Individual tax provisions [phase out begins when adjusted gross income (AGI) is above $75,000 (single) and $150,000 (joint)]:

  • Unemployment benefits – $10,200 exclusion for unemployment compensation in 2020 subject to above phaseout.
  • Recovery rebates – $1,400 per individual economic impact payment subject to above phaseout.
  • Child tax credit – Only for year 2021 increased to $3,000 per child (or $3,600 for a child under the age of six) and includes 17-year old children subject to above phaseout.


Please contact your tax advisor at WFY to discuss additional details regarding these tax benefits.  Click here to contact a WFY tax advisor.


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