On Monday, Dec. 21, 2020, Congress
passed an emergency stimulus package designed to deliver approximately $900
billion in COVID-19-related aid. The bill, which was part of a $1.4 trillion
spending package that will keep the government open for the fiscal year, has
been sent to President Donald Trump, and he is expected to sign it into law.
Notably, the bill provides funding for unemployment
benefits, small businesses, direct economic payments to individuals, vaccine
distribution and rental assistance. This article provides an overview of what
is included within the emergency relief bill.
Unemployment Benefits Funding and Extension
The bill includes
funding for unemployment benefits for out-of-work Americans. Specifically, this
bill allows unemployed Americans to receive $300 per week in federal funding in
addition to the existing unemployment aid they may be collecting from their
state, if those state-level benefits have not already run out. The additional
unemployment benefits and extensions included within this bill would provide
aid for 11 weeks from their expiration at the end of December 2020 through at
least March 14, 2021.
relief for unemployment benefits was introduced by the Coronavirus Aid, Relief,
and Economic Security (CARES) Act, which was enacted on March 27, 2020. The
CARES Act provided funding for states to waive any waiting week requirements
for unemployment income (UI) benefits during the COVID-19 pandemic and to provide
an additional $600 per week to all individuals receiving UI benefits for weeks
of unemployment ending before July 31, 2020. President Trump signed a
memorandum to extend a portion of unemployment wages after the initial $600 per
bill includes an extension of Pandemic Unemployment Assistance (PUA). PUA is a
program that allows workers who are not traditionally eligible to receive
unemployment benefits, including self-employed and gig workers, to do so. An 11-week
extension in base benefits through this program is also included within the
Aid for Businesses
The bill includes approximately
$325 billion in funding to the Small Business Administration (SBA) to assist
U.S. businesses that have been affected by the COVID-19 pandemic.
bill allocates $284 billion in funding to replenish the Paycheck Protection
Program (PPP), which provides forgivable small business loans to eligible
applicants. Under the bill, certain firms that had already applied for,
received and exhausted PPP funds will be eligible to apply for another PPP
loan. To be eligible for a second PPP loan, a small business must have less
than 300 employees and have sustained at least a 30% loss in revenue during any
quarter of 2020. Additionally, small 501(c)(6) organizations with 150 or fewer
employees that are not lobbying organizations would be eligible for a PPP loan
with this round of funding.
The bill also provides the following with regard to the PPP:
- Expansion of expenses eligible for loan
forgiveness to include supplier costs and investment costs related to modifying
facilities and obtaining personal protective equipment for safety
- Simplified loan forgiveness process for
businesses that have borrowed $150,000 or less in PPP loans
- Confirmation that business expenses paid for
with PPP loan funds are tax deductible
Businesses interested in applying for
a PPP loan should contact their lender for more information.
The bill also directs $15 billion in funding
for independent live-venue operators affected by COVID-19 and another $20
billion for small business grants.
Direct Economic Impact Payments
The bill includes another round of economic impact payments—commonly
referred to as stimulus checks. The CARES Act provided the first round of
stimulus checks for eligible Americans. Under the CARES Act, tax filers with an
adjusted gross income of up to $75,000 for individuals and up to $150,000 for
married couples filing joint returns were eligible to receive the full payment
of $1,200 per individual or $2,400 per married couple. Parents were also
eligible to receive $500 for each qualifying child.
The bill follows the same eligibility guidelines as the CARES
Act, but the amount of the stimulus check is less this time around. Instead of
being eligible for a $1,200 payment, qualifying taxpayers are eligible for a
payment of $600 per individual or $1,200 per married couple. Parents will also
be eligible to receive $600 for each qualifying child.
Other Provisions Included in the Bill
The bipartisan bill provides funding for a variety of other
- U.S. Postal Service—$10 billion
- Health Care Provider Relief Fund—$35 billion
- COVID-19 Testing and Tracing and Vaccine
- Transportation Industry Relief (Airlines,
Airports, Buses, Transit and Amtrak)—$45 billion
- Education—$82 billion
- Housing Assistance (Rental)—$25 billion
- Additionally, the bill extends the federal
moratorium on evictions until the end of January 2021.
Another provision included in the bill is a ban on surprise
medical bills—to help protect insured patients from large medical bills when
they unknowingly receive out-of-network care. The bill also includes enhanced
tax credits, including the employee retention tax credit for employers that
keep employees on payroll and provide paid sick leave. Under the bill, the
earned income tax credit and child tax credit would become available to those
who lost wages or their jobs during the COVID-19 pandemic, and expand the low-income
housing tax credit.
to view the full text and see what else is included within the bill.
What’s Not Included in This Bill
Although providing direct aid to state, local and tribal
governments and establishing an employer liability shield were included in
early drafts of the bill, the two provisions were not included in the final
text. These provisions were intensely negotiated by both parties and were the
main cause of the stalled negotiations, but were ultimately dropped in order to
pass the bill in a timely manner.
While the bill doesn’t provide direct aid to state, local and
tribal governments, it does extend the deadline for states and cities to use
unspent money provided by the CARES Act. Under the CARES Act, states and cities
had until the end of 2020 to spend their funds, and any unspent amount would
have to be returned to the Department of Treasury. This bill extends the
original CARES Act deadline for a full year.
Lastly, the Families First Coronavirus Response Act (FFCRA) was
not explicitly extended by the bill, and so employers are no longer required to
provide federal FFCRA leave past Dec. 31, 2020. There is, as alluded to
earlier, a provision in the bill that pertains to FFCRA which provides that
employers who voluntarily choose to continue to provide leave in line with
FFCRA terms can continue to receive a federal tax credit for leave through
March 31, 2021.
Employers should keep in mind that some states and local
jurisdictions have passed their own FFCRA-like laws that extend beyond Dec. 31,
2020, and others that were set to end Dec. 31 may be extended well into 2021.
As previously mentioned, the bill has been sent to President Trump, who is expected to sign the bill into law. We will continue to monitor developments and provide updates as necessary.
As has been the case since 1950, the professional agents and underwriters at Morris & Reynolds Insurance are happy to help you. Whether you have a question about this topic or need help with any form of insurance, please contact us at any time at 305.238.1000.