President Biden has signed the American Rescue Plan, a $1.9 trillion relief package that contains several provisions that will assist the arts sector endure the economic strain caused by the pandemic.
The American Rescue Plan includes an extension of federal unemployment programs, more funding and flexibility for the Shuttered Venue Operators Grant (SVOG), an expansion of the Employee Retention Tax Credit (ERTC) through the end of 2021, $135 million in arts relief through the National Endowment for the Arts (NEA), and $350 billion in relief to state, county, and municipal governments that could be used for additional relief for the arts sector. Arts NC is proud to see so much of the relief we have been advocating for provided in this package.
NOTE: Thanks to our colleagues at Arts North Carolina for the summary below. Please note that this info has come from reliable sources, however, we have not been able to independently verify this information with the final version of the bill text yet.
$350 Billion in Aid to State and Local Government: Relief funding totaling $350 billion will be distributed to state, territory, and tribal governments as well as to counties, metropolitan cities, and smaller cities and towns. The funds will be distributed as follows:
- $195.3 billion to states and Washington DC
- $20 billion for tribal governments
- $4.5 billion for US territories
- $60 billion to counties
- $42 billion to metropolitan cities
- $18 billion to smaller cities and towns
- $10 billion for a capital projects fund
There is still much we do not know about the details of how these funds can be spent, though the American Rescue Plan outlined four expenses on which these governments are required to use this funding:
- Respond to or mitigate the public health emergency with respect to COVID–19 or its negative economic impacts;
- Cover costs incurred as a result of such emergency;
- Replace revenue that was lost, delayed, or decreased (as determined based on revenue projections as of January 27, 2020) as a result of such emergency; or
- Address the negative economic impacts of such emergency.
It is possible that this funding may be used for arts relief in Wisconsin at the state, county, and municipal level. Arts NC will continue to monitor updates to this funding as it becomes available. We encourage our advocates to prepare to request relief from all levels of government in the coming months.
Shuttered Venue Operators Grant Funding and Flexibility: $1.25 billion be added to SVO Grant funds, for a total of $16.25 billion. Also, all those considering applying for an SVO Grant will be allowed to first apply for and receive a First or Second Draw PPP loan through an approved lender in this year, before the March 31st PPP application deadline. Eligible entities may then also apply for an SVO Grant when that application opens, subtracting their 2021 PPP loan amount from their SVO Grant award. This will allow many organizations that have already received a PPP loan in 2021 to also apply for an SVO Grant, as well as allowing some of the financial resources needed to fulfill the promise of the SVO Grant program to be drawn from the ample PPP funding currently available.
$135 Million in Arts Relief through National Endowment for the Arts (NEA): The NEA will receive $135 million in funding to provide relief for art organizations across the country. State and regional arts agencies will receive 40% of those funds to distribute. We don’t know what the Wisconsin Arts Board (WAB) will receive or how the NEA and WAB funds will be distributed. Arts Wisconsin will continue to monitor this funding disbarment and provide more information when it is available. The NEA will distribute the remaining 60% of the funding to arts organizations directly.
Extension and Tax Exemption of Federal Unemployment Assistance
- Federal Pandemic Unemployment Compensation (FPUC) is extended for 25 weeks through September 6, 2021. During that period FPUC will provide federal funding for a $300 increase to all UI weekly benefits resulting from the pandemic.
- Pandemic Unemployment Assistance (PUA) is expanded by 25 weeks (from 50 to 75 possible weeks), extending the program until September 6, 2021. PUA provides federal funding to states for weekly unemployment insurance (UI) benefits to the self-employed and independent contractors (1099 “gig” workers), as well as those who have exhausted all other UI benefits, who are unemployed as a result of the pandemic.
- Pandemic Emergency Unemployment Compensation (PEUC) is expanded by 25 weeks (from 24 to 49 possible weeks), extending the program until September 6, 2021. PEUC provides federal funding for weekly UI benefits of claimants who have exhausted their state UI benefits.
- Unemployment benefit payments will be tax-free for the first $10,200 of benefits for households with annual incomes less than $150,000.
Employee Retention Tax Credit (ERTC): will be extended for an addition two quarters at the same rate of up to $7,000 PER QUARTER (70% on $10,000 in wages)per employee for the first EVERY quarter of 2021 for those businesses and nonprofits that that had a20% loss of revenue in a single calendar quarter in 2020 compared to the same period in 2019, regardless if they have received a First or Second Draw PPP loan or an SVO Grant. These entities will also be able to receive a refundable credit for payroll taxes of up to $5,000 (50% on $10,000 in wages) per employee retroactively for all of 2020.
Arts Wisconsin does not provide legal or financial advice and we strongly encourage organizations interested in ERTC to consult their own tax professional. For more information, consult the IRS website.