Congress Passes $900 Billion Coronavirus Relief Bill

On Monday night, Congress passed a $900 billion economic relief package referred to as the Consolidated Appropriations Act, 2021. The bill is awaiting the President’s signature. Given the size of the legislation (nearly 5600 pages), this newsletter is meant to be a brief overview of key areas for the Firm’s clients. In addition to what is outlined below, the legislation also contains language relating to student loans, rental assistance, and medical bills among other items.

Stimulus Checks

The new relief bill provides $600 stimulus payments to many Americans (adults and children). Based on their 2019 tax return, individuals making up to $75,000 a year will receive a payment of $600, while couples making up to $150,000 will receive $1,200, in addition to $600 per dependent child. Individuals with incomes above these levels will receive a partial payment that declines by $5 for every $100 in income. The deal also makes the stimulus checks more accessible to immigrant families. The payments are expected to be dispersed next week.

Federal Unemployment

The legislation partially restores the enhanced federal unemployment benefit offering an additional $300 per week for 11 weeks. This would allow for an increased unemployment rate through March 14, 2021. The previous Federal unemployment (many referred to as “PUA”) which paid an additional $600 per week ended in July 2020 and the 13-week extension passed by the CARES Act ends December 31. These new benefits will be available to self-employed individuals, and independent contractors who have exhausted their state benefits.

In other words, most states pay benefits for 26 weeks, though some offer less (Florida offers 12 weeks). After that, the CARES Act extended benefits by 13 weeks. The latest package would add on 11 more weeks, bringing the total extension to 24 weeks — for anyone receiving either state benefits or pandemic unemployment assistance. This federal extension would turn off on March 14, unless the person filing for unemployment has not reached the benefit maximum, and then the benefits would continue to April 5.

The CARES Act had barred people who qualified for regular employment (W2 earners) from receiving the benefits from the program offering unemployment to freelancers and gig workers (independent contractor’s / 10-99s). This new bill addresses that by providing an additional $100 a week to some “mixed earners” — people who earn money both as employees and contractors — in order to address the CARES Act issue.

Small Business Help / Paycheck Protection Program (PPP)

Small businesses would see a total of $325 billion, including $284 billion in loans through the Paycheck Protection Program, $20 billion for businesses in low-income communities and $15 billion for struggling live venues, movie theaters and museums. The Paycheck Protection Program will allow businesses to receive a second loan and expanded eligibility under that program for nonprofit organizations, local newspapers and radio and TV broadcasters. The relief package also extended routine tax provisions, including the tax deduction for corporate meals.

The legislation allows businesses to deduct expenses associated with their forgiven PPP loans, in addition to expanding the employee retention credit intended to prevent layoffs. The package also extends a payroll tax subsidy for employers offering workers paid sick leave and boosts the Earned Income Tax Credit.

One area that remains notably absent from the relief package is any funding aid for state and local governments.

If you have any questions on how this new legislation affects you or your business please don’t hesitate to reach out: info@barbascremer.com. We are here to help you address the day to day questions of balancing business concerns, the law, and health and safety.