global Tax What’s Inside Biden’s Rescue America Plan? January 14, 2021 President Biden’s top priorities post inauguration include providing economic relief to help America continue recovering from the pandemic. What other tax and financial relief provisions are inside his plan? We explore here. The COVID-19 pandemic has taken a heavy toll on people and businesses in the United States. President Biden’s top priorities after inauguration includes providing economic relief to help America recover from the pandemic. Here are key tax and financial relief provisions of his $1.9 trillion “Rescue America Plan.” For Individuals Biden is asking Congress to pass legislation that includes the following provisions for individuals and families: Additional direct relief payments. His plan calls for direct payments of $1,400 per person to eligible recipients. Congress previously approved direct payments of $600 per person under the Consolidated Appropriations Act passed in late December 2020. (Therefore, the total direct payment from the federal government would be $2,000 per person.) Extended and expanded unemployment benefits. The proposal would increase federal unemployment benefits from $300 per week to $400 per week. These increased benefits would be available through September 2021. He would also like to extend the benefits to workers who don’t usually qualify for unemployment, such as self-employed Gig economy workers. Extended SNAP benefits. He would extend the 15% increase in Supplemental Nutrition Assistance Program (SNAP) benefits through September 2021. Increased tax credits for childcare. Under the proposal, families would be eligible for a tax credit of up to half of their spending on childcare for children under age 13, for a maximum of $4,000 for one child ($8,000 for two or more children). Increased child tax credit. His proposal would 1) increase the credit to $3,000 per child ($3,600 for a child under age 6), 2) allow families to claim 17-year-olds as qualifying children for 2021, and 3) make the credit fully refundable for 2021. Expanded earned income tax credit (EITC). For 2021, his proposal would increase the maximum EITC to $1,500 for childless adults, eliminate the age cap for older workers and raise the income threshold, allowing more households to qualify for the credit. The Rescue America Plan also calls for special relief measures for lower-income renters who lost their jobs during the COVID-19 crisis. And it would extend the CARES Act moratorium on evictions and foreclosures through September 2021. For Businesses Biden is also calling on Congress to pass legislation that includes the following provisions for businesses: Extended paid sick and family leave benefits. His plan would reinstate benefits provided by the Trump administration through September 2021. It would also extend leave benefits to workers employed at businesses with more than 500 employees and less than 50, as well as federal workers, who were excluded from the original program. The maximum paid leave benefit would be $1,400 per week for eligible workers. Under Biden’s proposal, employers would be eligible for a refundable tax credit for the cost of this leave. Additional funds for small businesses. The proposal includes $15 billion in grants funds to help small businesses recover from losses incurred during the pandemic. It also provides $35 billion for state, local, tribal and nonprofit financing programs to help small businesses “innovate, create and maintain jobs, build wealth, and provide the essential goods and services.” Biden’s plan also calls for Congress to raise the minimum wage to $15 an hour and to eliminate the tipped minimum wage. However, many small businesses oppose a wage increase while they’re struggling to stay afloat during the COVID-19 pandemic, arguing that it possibly could lead to cost increases and layoffs. Two-Step Plan Biden’s Rescue America Plan is the first step of an aggressive, two-step plan. He will introduce another the second component — the Build Back Better Plan — when he meets with Congress in the coming weeks. Questions? Reach out to us.