On December 27, 2020, President Trump signed into a law a new $900 billion coronavirus relief package. This much-anticipated bill was paired with a $1.4 trillion bill to continue government funding into September. We are already in the implementation phase and below are a few highlights:
- Roughly $280 billion of the relief bill goes toward the Paycheck Protection Program, the bulk of the $325 billion assigned to small businesses. Businesses can apply for another PPP loan, regardless of whether they have received one previously. The eligibility requirements are a little clearer this time around: Businesses must have fewer than 300 employees and gross receipts must have declined by 25% or more in any 2020 quarter as compared to 2019. It’s important to note that Congress clarified that business owners will be entitled to their typical business deductions even if expenses are paid out of loan proceeds that are forgiven.
- The stimulus package includes $600 direct checks to most Americans, with phaseouts beginning with AGI over $75,000 single/$150,000 joint.
- The package includes $300 per week in enhanced federal unemployment benefits through March 14th. Unemployment during this time is extended to self-employed and “gig” workers.
- FSAs can be rolled over from 2020 to 2021, and from 2021 to 2022. The bill extends the grace period to 12 months after the end of a plan year for plans ending in 2020 and 2021. Mid-year prospective changes in contributions are also allowed.
- $82 billion will go to support public and private education.
- $69 billion will go towards COVID-19 vaccines, testing, and tracing.
- $25 billion is designated for rental assistance and an extension on the moratorium on evictions through January 2021.
- There are a few other provisions including $45 billion designated for transportation resources (primarily airlines and public transportation); $15 billion of grants for independent movie theaters, live entertainment venues, and cultural institutions; $13 billion in funds for food-stamp and child-nutrition benefits; $12 billion for farmers and rural communities; $1.8 billion in tax credits for businesses to provide paid leave; and bringing a tax deduction back to businesses for restaurant meals.
Details continue to emerge and changes/updates are always possible, but this gives an overview of the critical parts of the package. Stay tuned!