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COVID-19 Business Updates
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Payroll Provisions of the American Rescue Plan Act

March 19, 2021

The American Rescue Plan of 2021 (ARPA) was signed by President Biden on March 11, 2021. The legislation extends and expands provisions found in the Families First Coronavirus Relief Act (FFCRA), the Coronavirus Aid, Relief and Economic Security (CARES) Act, and the Consolidated Appropriations Act, 2021 (CAA).   

Dependent Care Assistance. The amount of taxable wage exclusion for dependent care benefits is increased from $5,000 to $10,500 for married couples filing jointly. The amount of excludable wages for married couples filing separately is $5,250. This increase applies to any taxable year beginning after December 31, 2020, and before January 1, 2022, effective December 31, 2020.

Employee Retention Credit (ERC).  The following 2021 ERC chart summarizes the ERC from its creation under the CARES Act through the changes made by the ARPA.

Paid Sick and Family Leave.  The following 2021 Paid Sick and Family Leave chart summarizes the Paid Sick and Family Leave, and related credits, from its creation under the CARES Act through the changes made by the ARPA.

Reach out to your MarksNelson advisor if you have questions.

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