American Rescue Plan Act: Tax Changes for Businesses


The $ 1.9 billion American Rescue Plan Act (ARPA) of 2021 (PL 117-2) became law on March 11, 2021. Known as ARPA, the broad law contains many tax relief measures for businesses, with different effective dates. .

Tax treatment of financial assistance programs

ARPA provides funding for a variety of already enacted programs offering loans, grants, and other assistance to businesses affected by COVID-19. The new law effectively extends the Consolidated Appropriations Act of 2021 (CAA), enacted in December 2020, which made clear that certain types of loan forgiveness will not be taxable. This favorable tax treatment extends to:

  • The Paycheck Protection Program (PPP)
  • SBA Economic Injury Disaster Loan (EIDL) advances up to $ 10,000
  • Shuttered Venue Operator Grant (SVOG) funds for operators or promoters, theater producers, operators of live performing arts organizations, museum operators, theater operators and talent representatives are not taxable, while Expenses are tax deductible to the extent permitted. The new law applies a similar treatment to:


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