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American Rescue Plan Act 2024 | PayNW

Written by PayNW | Oct 2, 2023 4:00:00 AM

On March 11th, President Biden signed the American Rescue Plan Act into law. The newly enacted law includes credit updates to Employee Retention Credit, Families First Coronavirus Response Act, and the Consolidated Omnibus Budget Reconciliation Act.

American Rescue Plan Act Overview

As a result of the American Rescue Plan Act (ARPA), updates were made to the Families First Coronavirus Response Act (FFCRA), Consolidated Omnibus Budget Reconciliation Act (COBRA), and most importantly the Employee Retention Credit (ERC) created by the CARES Act

American Rescue Plan Effects on ERC

The American Rescue Plan Act extended the credit reporting period for ERC through the 4th quarter of 2021.

However, due to the Federal Infrastructure Bill, the end of ERC was accelerated retroactively to October 1st of 2021. However, this cut-off date does not apply to wages paid by a recovery startup business.

These updates have allowed businesses in need of relief to take advantage of the ERC for a reporting period throughout 2020 and 2021 with updated tax credit amounts.

American Rescue Plan Effects on FFCRA

The voluntary offering of FFCRA Leave was extended from April 1 to September 30, 2021. 

American Rescue Plan Effects on COBRA

Due to ARPA, employees, who were entitled to COBRA coverage any time between 4/1/2021 through 9/30/2021 as a result of loss of coverage under a group health plan due to involuntary loss of employment or reduction of hours, must be provided with a full (100%) subsidy for their COBRA premium due within the period.

Eligible individuals could not be charged for a COBRA premium within the period, and the Employer can recover the government’s premium subsidy through quarterly employment tax credits. 

Questions on ARPA?

Questions on the American Rescue Plan Act? Contact us today and let PayNW help. Or contact us to learn more about our other HR and compliance services.