President Biden Signs American Rescue Plan Act
On March 11, 2021, President Biden signed the American Rescue Plan Act (ARPA), which provides almost $2 trillion to support families and businesses affected by the COVID-19 pandemic. Here is a summary of the tax-related provisions in the Act.
- Compensation Limitations – The existing limitation on public companies’ deductible compensation to $1 million is expanded from the original three officers to now include the next five highest compensated employees. This becomes effective for tax years beginning January 1, 2027, or later.
- Excess Losses – the rule limiting excess losses (over $250,000) from pass-through entities has been extended one more year through 2026.
Your BMF Advisor can help you determine the applicability of your unique situation. Contact us if you have questions about these changes or how your tax status could be affected.
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