The leading news of the week from the political world has been the $900 billion stimulus package that was passed by Congress on Monday, December 21st. After several months of stalemate between the divided house and senate, a COVID-19 relief bill finally won enough votes to be placed on President Trump’s desk for his signature. It is expected that he will eventually sign it into law, although he has demanded revisions be included in some aspects of the bill.
In this post, we’ll talk about the most important aspects of this bill that employers need to be aware of. Specifically, we’ll discuss:
- Unemployment Benefits Funding and Extension
- Business Aid
- Direct Economic Impact Payments
- Other Important Aspects of the Bill
Unemployment Benefits Funding and Extension
The bill opens the door for unemployed Americans to receive $300 per week in federal aid in addition to any unemployment aid they may be receiving from their state. Unemployment benefit funds in some states have already dried up, but that will not affect an unemployed worker’s access to this federal aid. The bill lays out a timeline to provide this federal unemployment aid from the end of December 2020 through March 14, 2021, although the bill has language indicating it could last longer.
For added context on this aspect of the bill, recall that the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed on March 27, 2020, provided funding for states to waive any waiting week requirements for unemployment income throughout the pandemic. The CARES act also provided an additional $600 per week to all individuals receiving unemployment income benefits for weeks of unemployment ending before July 31, 2020. President Trump extended a portion of unemployment wages after the initial $600 per week expired.
The bill that was passed on December 21st includes an extension of Pandemic Unemployment Assistance (PUA). PUA is a program that allows employees who are not traditionally eligible to receive unemployment benefits to do so. Examples include:
- Self-employed workers
- Workers in gig industries (Like Uber)
- Various types of independent consultants
- Some hourly workers
An 11-week extension in base benefits through this PUA is also included within the bill.
Key Highlight: The new stimulus bill that was passed by Congress on December 21st, 2020, will provide $300/week for unemployed Americans. It also extends the Pandemic Unemployment Assistance program, which provides unemployment benefits for self-employed or gig workers.
The Small Business Administration (SBA) will receive $325 billion through this bill to assist businesses in the United States that have been affected by the COVID-19 pandemic.
Of this amount, $284 billion will go towards replenishing the Paycheck Protection Program (PPP), which provides forgivable small business loans to eligible applicants.
Business owners will be happy to learn that certain firms that had already applied for, received and exhausted PPP funds will be eligible to apply for another PPP loan. The eligibility requirements are as follows:
- A small business must have less than 300 employees
- The business must have sustained at least a 30% loss in revenue during any quarter of 2020
- 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 affects the PPP in the following ways:
- Supplier and investment costs related to modifying facilities and obtaining personal protective safety equipment are now eligible expenses for loan forgiveness
- The loan forgiveness process for businesses that have borrowed $150,000 or less in PPP loans has been simplified
- It has been confirmed that business expenses paid for with PPP funds are tax deductible
It is important to note that businesses interested in applying for a PPP loan should consult with their lender. Money should never be borrowed without consulting an expert first.
There are two other relevant aspects of this new bill that will affect some businesses:
- The bill directs $15 billion in funding for independent live-venue operators
- The bill adds another $20 billion for small business grants
Key Highlight: The new stimulus bill replenishes funding for the Paycheck Protection Program (PPP). Some business owners will be able to apply for a PPP loan for a second time. The bill also expands eligible expenses for loan forgiveness and simplifies some processes.
Direct Economic Impact Payments
The part of this bill that has received the most news coverage is another round of stimulus checks. Eligible Americans received a first round of stimulus checks under the CARES Act last spring. Under the CARES Act, individuals earning up to $75,000/year or married couples (who file jointly) earning up to $150,000 were eligible to receive the full payment of $1,200 per individual or $2,400 per couple. A $500 payment was included for each qualifying child.
The new bill follows the same eligibility requirements as we saw under the CARES Act. However, instead of being eligible for a $1,200 payment, qualifying taxpayers are only eligible for a payment of $600 per individual or $1,200 per married couple. Parents will be eligible to receive $600 for each qualifying child. President Trump is currently demanding congress increase the payment amount provided, although it remains to be seen how this will pan out.
Key Highlight: The new bill, as it stands, will provide stimulus payments of $600 per individual, or $1,200 for married couples filing jointly. Parents will be eligible to receive $600 for each qualifying child. As with the CARES Act earlier in 2020, eligibility requirements apply.
Other Things to Know About the Bill
There are a few other general aspects of this bill that business owners should be aware of.
Other provisions in the bill:
- U.S. Postal Service—$10 billion
- Health Care Provider Relief Fund—$35 billion
- COVID-19 Testing and Tracing and Vaccine Distribution—$69 billion
- 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
What’s not included in the bill:
- There is no direct aid provided to state, local, or tribal governments
- The Families First Coronavirus Response Act (FFCRA) was not explicitly extended by this bill
- This means that employers are no longer required to provide federal FFCRA leave later than December 31, 2020
- Keep in mind that some states have passed their own FFCRA-like legislation
Key Highlight: Several industries will receive significant federal funding under the new bill. The bill includes no direct aid to local governments. Also, the FFCRA is not extended by this new bill.
The new $900 billion stimulus package will not be official until it is signed by President Trump. Trump has criticized certain aspects of the bill, and it currently demanding some updates. It’s expected he will eventually sign it into law. The most important things for employers to know about the bill are as follows:
- The new stimulus bill will provide $300/week for unemployed Americans. It also extends the Pandemic Unemployment Assistance program, which provides unemployment benefits for self-employed or gig workers.
- The new stimulus bill replenishes funding for the Paycheck Protection Program (PPP). Some business owners will be able to apply for a PPP loan for a second time. The bill also expands eligible expenses for loan forgiveness and simplifies some processes.
- As it stands, the new bill will provide stimulus payments of $600 per individual, or $1,200 for married couples filing jointly. Parents will be eligible to receive $600 for each qualifying child. As with the CARES Act earlier in 2020, eligibility requirements apply.
- Several industries will receive significant federal funding under the new bill. The bill includes no direct aid to local governments. Also, the FFCRA is not extended by this new bill.