In Part 1, we outline the American Rescue Plan’s direct benefits to families. In Part 2, we will focus on business and state funding.
Capital Projects Fund
One big talking point discussed by the Biden administration is the inadequate U.S. infrastructure. To improve connectivity for all American families, especially those in low and moderate-income communities and rural areas, $10 billion is provided to states, territories, and Tribes to cover capital project costs to improve internet access for all.
Emergency Rental Assistance
At-risk households in danger of losing their housing because of the inability to pay their rent may see some much-needed relief from the Emergency Rental Assistance (ERA) program.
The law provides Local, state, and territory governments $21.6 billion in funding to help households unable to pay for rent and utilities because of the COVID-19 pandemic.
Homeowner Assistance Fund
Renters aren’t the only ones impacted by COVID-19. Homeowners have also been struggling with job loss and illness, causing delinquent mortgage payments.
To reduce expected foreclosures in the future and allow emergency shelters to stay under capacity, state, territory, and Tribal governments have received close to $10 billion as part of the American Rescue Plan.
State and Local Fiscal Recovery Fund
The need for services has skyrocketed in the wake of the COVID-19 pandemic. Yet, state and local revenues have dwindled as part of the economic fallout.
The American Rescue Plan provides emergency funding of $350 billion to local, state, territorial, and Tribal governments to provide much-needed relief. The plan divides the funds up in the following ways:
- $130 billion for local governments, with a minimum of $1.25 billion going to each state
- $195 billion for states, a minimum of $500 million provided to each state
- $4.5 billion to territories
- $20 billion to tribal governments
Jurisdictions can use support to aid in recovery. This includes investing in infrastructure (broadband, sewer, and water services) and small businesses and nonprofits, impacting industries, households, and supporting essential workers.
Employee Retention Credit and Paid Leave Credit Programs
To support businesses with the ability to keep employees and provide paid leave for illness to protect employees’ health, the American Rescue Plan offsets current payroll tax liabilities.
The Employee Retention Credit offsets up to $7,000 per employee per quarter through December 2021 for businesses with declining revenue or shuttered their doors because of COVID-19.
Through September 2021, Paid Leave Credits for small and mid-sized businesses can take dollar-for-dollar tax credits equal to wages up to $5,000 for paid leave offered to caregiving, sick, or quarantining employees.
State Small Business Credit Initiative
According to the American Rescue Plan, at least 400,000 small businesses have permanently closed, and revenues are down 32% because of the pandemic. The American Rescue Plan provides $10 billion to state and Tribal governments to fund small business credit expansion initiatives.
The amount is divided as follows:
- $500 million to small business with less than ten employees
- $1 billion to incentivize states supporting small businesses
- $1.5 billion to support economically and socially disadvantaged small businesses
Confused About the American Rescue Plan?
We can help! As a small business, JStevens Accounting in Annapolis, Maryland, is acutely aware of how much devastation has been brought to this community in the wake of the COVID-19 pandemic.
If you’re still confused about the American Rescue Plan or any of the other economic relief packages provided to small businesses, contact us today so we can help you get the funding for which you qualify.