The $1.9 Trillion COVID Relief, American Rescue Plan, has passed the Senate. It contains several tax provisions.
See one summary provided by Deloitte, which begins as follows:
The Senate voted 50-49 on March 6 to approve its version of the American Rescue Plan, President Biden’s $1.9 trillion tax-and-spending package to address the continuing economic and health impacts of the COVID-19 pandemic.
Passage came along strict party lines with all of the chamber’s Democrats aligned in support of the bill and all Republicans in opposition. GOP Sen. Dan Sullivan of Alaska had to leave Washington because of a family emergency and was not able to cast a vote, meaning Democrats did not have to rely on Vice President Harris to break what likely otherwise would have been a 50-50 tie.
What’s retained from the House bill
The measure hews closely to legislation approved in the House of Representatives on February 27. On the tax side, both bills call for additional direct economic impact payments to individuals, temporary enhancements to certain family-focused tax credits, expanded tax relief for certain hard-hit businesses, and provisions to shore up financially struggling multiemployer and single-employer pension plans.
Both measures also include revenue-raising provisions that would:
Repeal the worldwide interest allocation election under section 864(f), which took effect on January 1 of this year and
Reduce the reporting threshold for third-party settlement organizations from $20,000 and 200 transactions per payee under current law to $600 without regard to the number of transactions, generally effective for transactions after December 31, 2021. Special reporting rules would apply as of date of enactment.
(For additional details on the House-passed legislation, see Tax News & Views, Vol. 22, No. 8, Feb. 27, 2021.)
But the Senate bill as introduced on March 4 made a number of modifications to the tax title and the spending provisions in the House-approved legislation. Additional changes were adopted during the Senate’s “vote-a-rama” process that followed the general debate on the measure.
This special edition of Tax News & Views highlights the tax-related changes that were approved as part of the Senate legislation and discusses what will need to happen next before a final package can make its way to President Biden’s desk.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.