President Donald Trump on Sunday night signed into law the $900 billion COVID-19 relief bill overwhelmingly passed Dec. 21 by Congress. The bill is over 5,500 pages; for comparison, the $2 trillion CARES Act passed in March was 335 pages. As a result, we are still working through the details and invite you join us for a webinar with members of our team to review the most important parts of the legislation. The webinar is scheduled for Wednesday, December 30th at 12:00 NOON EST. REGISTER HERE for the webinar.
Key points of this bill are listed below:
- Allocates $166 billion for economic impact payments of $600 check to many Americans. The phase-out begins for those earning $75,000 annually and disappears at $99,000 ($150,00 for joint filers). The payments are expected as early as next week.
- Additional unemployment benefits of $300 a week, lasting through mid-March. $120 billion to provide workers receiving unemployment benefits a $300 per week supplement from Dec. 26 until March of 2021. This bill also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others in nontraditional employment, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits.
- Provides $325 billion in small business aid including more than $284 billion for businesses and revival of the Paycheck Protection Program, $20 billion to provide Economic Injury Disaster Loan (EIDL) Grants to businesses in low-income communities, $15 billion in dedicated funding for certain live venues, independent movie theaters, and cultural institutions.
- Paycheck Protection Program Revival key takeaways include the following (we expect guidance and final rules from the SBA within 10 days of enactment) :
- The bill overrides the recent IRS decision related to forgivable PPP expenses and clarifies that deductions are allowed for otherwise allowable expenses paid with the proceeds of a PPP loan that is forgiven.
- PPP forgiveness will no longer be reduced due to an EIDL Advance clearing up major uncertainty and concern for many lenders and borrowers.
- Expansion of eligible borrowers to include, with limitations, housing cooperatives, news & radio, destination marketing and 501(c)6 organizations.
- Includes language confirming that other employer-provided group insurance benefits such as group life, disability, vision, or dental insurance are included in payroll expenses. Borrowers may request an increase to their loan if previously not included.
- Expanded non-payroll costs including certain software expenses, property damage costs occurring in 2020 that are not covered by insurance, certain supplier costs, and certain PPE costs
- Simplified Application for Loans Under $150,000
- Guidance expected not more than 24 days after enactment of the Act – unclear if 3508S form will be expanded to include loans up to $150,000 (currently limited at $50,000)
- The Covered Period is now anytime at the borrower’s discretion between 8 and 24 weeks.
- PPP2 loans will be available to first-time qualified borrowers and, for the first time, to businesses that previously received a PPP loan. Specifically, previous PPP recipients may apply for another loan of up to $2 million, provided they:
- Have 300 or fewer employees;
- Have used or will use the full amount of their first PPP loan
- Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.
- Economic Injury Disaster Loan (EIDL) Grants
- Existing EIDL Advance grantees that received less than $10,000 may reapply to receive the difference.
- $20 billion to provide Economic Injury Disaster Loan (EIDL) Grants to businesses in low-income communities.
- $15 billion for the SBA to make grants to eligible live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives who demonstrate a 25 percent reduction in revenues.
- Guidance indicating similar tax treatment as the PPP – not included in gross income and deductions allowed for otherwise deductible expenses.
- Expands the business meals deduction from 50% to 100% of the cost of food and beverages for tax years 2021 and 2022.
- Breaks for renters and homeowners: $25 billion in rental relief and an extension of the eviction moratorium through Jan. 31, 2021.
- A ban on surprise medical bills, which sometimes occur when a patient unexpectedly receives care outside of a network. Going forward, insurance companies will have to work these out with providers.
- $45 billion for transportation ($15 billion to reinstate payroll reimbursements to airlines, $1 billion for airline contractors, $4 billion for airports, $15 billion for transit,
- $8 billion for motor coaches, $1 billion for Amtrak and an unspecified amount for state highways),
- $82 billion in funding for colleges and schools, including support for HVAC repair and replacement to mitigate virus transmission, and $10 billion in child care assistance,
- $13 billion for emergency food assistance, including a 15% increase for six months in Supplemental Nutrition Assistance Program benefits.
- Provides for $22 billion for health-related expenses incurred by state, local, Tribal, and territorial governments, and
- $69 billion for the distribution of a coronavirus vaccine and more than $22 billion for states to conduct testing, tracing, and coronavirus mitigation programs.
- Tax Breaks, Extensions and Changes
- Renews of the employee retention tax credit for businesses.
- Changes the earned income tax credit and the child tax credit.
- Makes permanent and/ or expands various expiring tax provisions.
We will provide updates as the bill is signed into law and as our team digs into the details and learns more about how the robust relief package impacts you. Join us next Wednesday for a webinar to discuss the most important pieces of the legislation and for the opportunity to have our team answer your questions. REGISTER FOR WEBINAR HERE
Please visit www.brinkersimpsoncares.com for more info and contact us at firstname.lastname@example.org if we can be of assistance to you.
We are still in this together,
Brinker Simpson & Company, LLC
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s)