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ARP Tax Changes Include Credit Extensions/Expansions, Tax Relief for EIDL and Grant Recipients, and Changes to Worldwide Interest Allocation Rules
Among many other provisions, the American Rescue Plan (ARP), the $1.9 trillion COVID-19 relief package, makes changes to the Internal Revenue Code, including extension and expansion of COVID-19-related employment tax credits, clarification of the treatment of forgiven emergency loans and grants, and removal of a provision related to the allocation of worldwide interest expenses.
Extension and Expansion of Employee Retention Credit (ERC)
The ARP provides another expansion of the successful ERC, a fully refundable payroll tax credit for employers equal to 50 percent of “qualified wages” paid by employers beginning on March 13, 2020. See our detailed discussion of the ERC as originally enacted here. To be eligible for the ERC, a business must (i) be fully or partially suspe