Chris Hand
December 21, 2020
When the COVID-19 pandemic struck the United States in March 2020, the U.S. Congress responded with unusual speed and bipartisan consensus. Within weeks, legislators passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act – a $2 trillion economic stimulus package to provide relief to taxpayers, businesses, industries, and unemployed workers. The CARES Act authorized direct payments to Americans, established the Paycheck Protection Program (PPP) to help small businesses survive, enhanced unemployment benefits, and provided targeted financial assistance to hospitals, distressed industries, and state/local governments.
Unfortunately, the CARES Act marked the high point of congressional responses to a growing crisis. After March, the pandemic worsened to the point that the nation has now seen nearly 18 million COVID-19 cases and more than 300,000 deaths. According to the Department of Labor, more than 20 million American workers were collecting unemployment at the end of November. Nearly 1.5 million new unemployment assistance claims were filed in early December.1 Yelp found more than 160,000 of its listed businesses closed before September – with 60% of closures becoming permanent.2 Nationally, one in four small business have closed.3
Despite those severe challenges, Congress was unable to reach agreement for nearly nine months on additional economic assistance – until now. The House and Senate have now agreed on new stimulus legislation to provide much-needed immediate relief to businesses and families suffering from the COVID-19 economic shock. The package contains several key relief measures, including the provisions outlined below:
1. Additional Direct Payments. Each American whose last filed tax return reflected an adjusted gross income (AGI) of less than $75,000 for a single filer, or who filed jointly with a total AGI of less than $150,000, will be provided with a $600 payment. This payment will be supplemented with an additional $600 for each child dependent. Payments will phase out above a $75,000/$150,000 AGI and end entirely at $99,000/ $198,000.
2. More Small Business Assistance. The PPP provided forgivable loans to small businesses, self-employed individuals, gig economy workers, and some non-profits. The new legislation appropriates $284 billion to fund new loans for first-time PPP recipients and additional loans for previous PPP beneficiaries experiencing major revenue losses. It also confirms the deductibility of business expenses paid with PPP funds. 4
3. Enhanced Unemployment Benefits. State governments manage unemployment assistance. In Florida, the maximum unemployment benefit is only $275/week. In the CARES Act, the federal government added $600 per week to state payments. But these supplemental unemployment benefits ended in July 2020. The new federal stimulus package will enhance state unemployment payments by $300 per week for 11 weeks. This enhancement will raise the maximum Florida unemployment benefit to $575 per week through March 14, 2021.
4. Rental Assistance. The Centers for Disease Control previously paused evictions through 12/31/20. The new legislation extends the moratorium through1/31/21 and provides$25 billion in emergency rental assistance.
5. Extended Employee Retention Tax Credit. The March CARES Act established this tax credit to encourage “businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer.”5 Congress has extended and expanded the credit in the new legislation.
__________________________________________________________________________________________________ Chris Hand (www.linkedin.com/in/chrishandjax/) has served at every level of government, including as a U.S.
Senate press secretary and Chief of Staff at the consolidated City of Jacksonville. Hand Law (www.hand.law) is a strategic government law firm which helps clients navigate governmental opportunities and challenges.