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March 24, 2021 | Financial Planning
The American Rescue Plan Act (ARPA), signed by President Biden on March 11th, provides new funds and tax credits designed to help struggling small businesses recover from the ongoing pandemic. Below we list key details on the provisions that include tax relief, expansion of credits and continuation of programs that were put in place to help businesses stay afloat.
Particularly welcomed by state and local government budgets stretched to their limits is the inclusion of $350 billion for state and local government aid. Available through December 21, 2024, $219.8 billion is set aside for states, territories, and tribal governments, while the remaining $130.2 billion is for metropolitan cities, municipalities, and counties. While the necessity of the aid is open to debate, with some state and local budgets generating a surplus in 2020, it will provide critically needed funding for those hit hardest and help them get back on their feet. The legislation prohibits the state and local governments from using the aid to offset new tax cuts. As a result, smaller businesses that have fallen through the cracks with the initial relief funding may want to look to their local officials first for assistance.
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Please consult with an attorney or a tax or financial advisor regarding your specific legal, tax, estate planning, or financial situation. The information in this article is not intended as legal or tax advice.
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