Here’s What the American Rescue Plan Act Means for Music Creators
March 11, 2021
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, providing financial relief and other benefits for many Americans, including music creators. To help ASCAP members navigate the new COVID-19 relief measures, we outlined the key provisions for music creators below.
Stimulus Checks Are Back
The new legislation provides stimulus checks of $1,400 per individual and $5,600 for a family of four. To qualify for the full $1,400, a single person cannot exceed an adjusted gross income of $75,000. For heads of household, adjusted gross income must be $112,500 or below, and for those filing jointly their combined income cannot exceed $150,000. There is also a phaseout in place with cutoffs at $80,000 for single filers, $120,000 for heads of household and $160,000 for joint filers.
Unemployment Benefits Extended
Under the new legislation, the weekly Federal Pandemic Unemployment Compensation (FPUC) continues at $300 per week, and the Mixed Earner Unemployment Compensation (MEUC) benefits renew at $100 per week. Both of these provisions now run through early September, and up to $10,200 of 2020 unemployment benefits are tax exempt for unemployed workers.
Support for Small Businesses and Venues
As small businesses and venues across the United States face the grim one year milestone, The Economic Injury Disaster Loan (EIDL) program will see $15 billion in new funding, providing cash payments to small businesses severely affected by the pandemic. For struggling venues specifically, The Shuttered Venue Operators Grant (SVOG) program will also receive $1.25 billion in additional funding to support venues affected by the pandemic, and an amendment to the SVOG will also allow venues to apply for and receive funds from the second round of PPP loans.
Additional relief is also on the way for restaurants with a new restaurant-focused fund under the Small Business Administration (SBA). Often doubling as performance spaces, these businesses will now be able to apply for grants of up to $10 million per entity with a limitation of $5 million per physical location.
As many music creators run their own small businesses, the expansion of the Paycheck Protection Program (PPP) was crucial. The latest relief package provides for several billion dollars more in PPP grants and directs the SBA to focus the PPP funding on the smallest businesses, such as sole proprietorships.
UPDATE - 3/30/21: On March 30, 2021, the President signed a bill to extend the PPP application deadline from March 31, 2021 to May 31, 2021, allowing the SBA to continue processing applications for up to 30 days past the new date.
New Relief for Housing, Health Insurance and Taxes
With the possibility of eviction becoming all too real for many music creators struggling to make ends meet, the new relief package provides assistance to state and local governments to cover rent assistance, utilities and mortgage payments for low-income households. The new funding adds $21.5 billion for Emergency Rental Assistance and $9.9 billion for homeowner mortgage and utility assistance.
Among the provisions set to benefit music creators are the Affordable Care Act (ACA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA) subsidies. In certain instances, the new legislation lowers the cost of health insurance, providing a two-year increase in the ACA premium subsidy amounts to allow recipients to pay a smaller percent of income on insurance premiums. It also includes a two-year expansion of subsidy eligibility to individuals who have incomes greater than 400 percent of the poverty level. For those who lost their employer-sponsored health insurance, the new legislation creates a six-month federal subsidy covering 100% of the costs of the COBRA premiums for these individuals.
For music creators looking for ways to support their families, The American Rescue Plan Act increases the child tax credit to $3,600 for children under the age of six and $3,000 for those six and older. It also increases the Child and Dependent Care Credit to a maximum of $4,000 for one dependent and $8,000 for two or more.