$900B COVID Relief Aid Package Signed
The much discussed aid package has been signed into law after significant delay and controversy. We’ll be revisiting this topic in the coming days as the details become clearer.
Meanwhile, here are the key takeaways:
$166 billion for economic impact payments:
- A $600 check to many Americans. The phase-out begins for those earning $75,000 annually and disappears at $99,000.The amount is reduced by $5 for every $100 in additional income. If your 2019 income makes you ineligible but you made a lot less in 2020, you still may be eligible for the money in the form of a refundable tax credit.
$120 billion to provide workers receiving unemployment benefits:
- Additional unemployment benefits of $300 a week, lasting through mid-March.
- Additional benefits for freelancers and gig workers.
$325 billion in aid for small businesses:
- $284 billion for businesses and revival of the Paycheck Protection Program, which ended some months ago.
- $20 billion for Economic Injury Disaster Loan Grants
- $15 billion to live venues, independent movie theaters, and cultural institutions
- $12 billion to help businesses in low income and minority communities
One of the smallest provisions is also one of the most divisive: the return of the 100% deduction of the so-called three-martini lunch — that is, an increased tax break for business lunches, which are currently at 50%. This applies to restaurant and takeout meals paid for in 2021 and 2022, according to analysis from Forbes, and is not retroactive.
We recommend referencing this recent article posted by HW & Co. detailing the PPP Provisions.
According to the SHRM, key employer provisions include:
- The ability for workers to roll over unused funds in their health and dependent care flexible spending accounts.
- The expansion of employer-provided education assistance to include student loan repayment.
- Employer tax credits for paid family and medical leave.
- An extension of the employee retention tax credit.
- Delays in deferred payroll tax payments.
Several heavily debated items are off the table, although they may appear in bills in the near future. Their elimination was part of a series of compromises:
- No aid for state and local governments, which Democrats had pushed for.
- No liability protections for businesses, which Republicans had wanted.
- No checks for adult dependents.
- No hazard pay for essential workers.
Although the bill is now law, it may take a while before all the details become clear. The IRS and other government departments will likely offer additional guidance, and again, we will have more on the law’s provisions.