Newburg Staff Writers-December 21, 2020 (3:00PM)
After significant back and forth and a multitude of renditions, congressional leaders on Sunday night brokered a deal totaling $900 billion in relief. Both sides indicated promises to pass the formal legislation as soon as possible. Currently there is no formal text available on the innerworkings, but we will post as soon as available. Highlights within the bill would extend aid for businesses, childcare and schools, provide funds for vaccine distribution along with infusing another round of stimulus checks and additional jobless benefits. One of the last negotiated items (and perhaps most controversial) looks to reverse the Treasury Department’s position of denied PPP expense deductions and allow for the deductibility of PPP related expenses. Bipartisan lawmakers say they intended the benefit. It should be noted that deductions are likely to face some limits, but details of those restrictions are not yet available. As this is such an integral item to year-end business planning, we anxiously await the details.
What Made It In the Bill?
- Applicable to Businesses
- The bill provides more than $284 billion for first and second forgivable PPP loans.
- Businesses that have had or anticipate having their PPP loans forgiven may now receive potential deductions related to expenses covered by these loans on their federal tax returns. This item had been a significant point of contention, but Senator John Thune relayed the costs would be deductible under the final agreement despite the IRS’s opposition and notion that this would entail a “double dip”. As mentioned, the deductions are likely to face some limits, for which details are not yet available.
- The bill would reopen the PPP program to assist some of the harder hit smaller businesses.
- Expands PPP eligibility for nonprofits and news outlets and modifications to the program to serve small businesses, nonprofits and independent restaurants.
- The package also provides $15 billion in funding for independent movie theatres, live venues and cultural institutions.
- The deal includes $20 billion for targeted grants through the Economic Injury Disaster Loan program.
- The package also includes certain corporate meal tax breaks aimed to revive the restaurant industry (potential 100% deductibility through 2022.
- The legislation would make permanent an excise tax break for beer brewers, wine makers and distillers
- The bill contains tax credits to support employers offering paid sick leave;
- Additional funds have been reserved for smaller businesses as well as lending through minority depository institutions and smaller local community banks.
- Stimulus checks
- The bill includes $600 stimulus checks per person, including adults and children. That means a family of four would receive $2,400, up to a certain income threshold.
- The checks will be reduced for taxpayers who earned more than $75,000 in the 2019 tax year. The check amounts are fully-phased out for those who earned more than $99,000.
- Jobless benefits
- The bill extends unemployment benefits of up to $300 per week for a duration up to 11 weeks. Timing may commence as early as the last week in December according to officials.
- An unemployment benefits program for contract and gig workers, which is also set to expire at the end of the year, would also be extended for 11 weeks.
- School funding
- Schools and colleges will receive $82 billion to help reduce the risk of coronavirus infections and reopen classrooms covering such items as HVAC repair, replacement or enhancement.
- Also contained in the bill are provisions totaling $10 billion for childcare assistance.
- Rental assistance and eviction moratorium relief
- One month extension on the moratorium on evictions that was slated to expire at the end of the year.
- The bill also includes $25 billion in emergency assistance to renters, with more detail to follow on how the funds will be distributed.
- Vaccine distribution funding
- Billions are also set aside to accelerate vaccine distribution and carry out a national testing and tracing strategy.
- Other categories
- The Bill also incudes provisions to end surprise billing for emergency and scheduled care;
- $13 billion in increased food stamps and nutrition benefits;
- $7 billion to increase access to broadband.
- $27 billion for state highways, struggling transit agencies, Amtrak and airports;
- $22 billion for the health-related expenses of state, local, tribal and territorial governments.
What Proposed Items Did NOT Make it In the Bill?
- Aid to state and local governments
- The bill lacks new money for state and local governments. This area may be addressed in subsequent bills.
- Negotiators are extending the deadline for states and cities to utilize unsent Cares Act funds.
- Liability protections
- Liability shield for companies that can be sued by workers over virus related outbreaks did not make the Bill. Although this may be addressed in subsequent bills.
- Unemployment and stimulus reductions
- The bill ultimately did not address retroactive unemployment insurance and did not include hazard pay for essential workers.
- The bill does not extend stimulus checks to adult dependents.
This is a high-level overview of only some of the key items making their way through the new $900 billion stimulus package. House or Representatives is expected to vote on the legislation today, followed by a Senate vote later in the day. As we receive, we will have more important details to share.
Please contact us should you have any questions.