Late in December, lawmakers voted on a $900 billion COVID-19 Relief Package that will have large impact on individuals and business owners alike. Here’s what’s included in this bill:
Individual Relief Impact
For individuals making less than $75,000 a year or couples making less than $150,000, you will each see a $600 check. Like the CARES Act, this benefit will phase out for individuals making between $75,000 and $100,000 and anyone (individual) making $100,000 or more will not receive a check at all. Again, similar to the original CARES act, parents with dependent children will also see a check, but this time instead of being $500 per dependent, it will be $600.
This new bill will add 11 weeks to the originally sunsetting (by December 31st) unemployment aid. This Pandemic Unemployment Compensation (PUC) which was originally set at $600 per week per unemployed individual and was set to expire at the end of this month will be renewed at $300 per week. This is now set to expire on March 14th, 2021
Other Individual Impact Areas of the $900 Billion Bill
- An extension of the national eviction moratorium through Jan. 31, 2021
- Aid for K-12 schools and colleges will amount to $82 billion
- A reduction in the income threshold for medical expense deductions from 10 percent to 7.5 percent
Business Relief Funding
Small Business Relief Funding
Many small businesses have experienced financial hardship during the pandemic. This new spending bill has allocated $325 billion for forgivable loans such as Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). EIDL grants are not considered taxable. Read more about the new round of PPP known as PPP2 here.
The U.S. Senate Committee on Small Business & Entrepreneurship summarizes the legislation for live venues as follows: $15 billion for SBA to make grants to eligible live venues, independent movie theaters, and other cultural institutions that can demonstrate a revenue loss of 25 percent to address the economic effects of the COVID-19 pandemic. The SBA may make an initial grant of up to $10 million dollars to an eligible person or entity and a supplemental grant that is equal to 50 percent of the initial grant. Grants can be used to cover expenses such as payroll costs, rent, utilities, and personal protective equipment. Two priority periods are established to ensure the hardest-hit entities have dedicated access to assistance for the first 28 days of the program, while a reserve fund is made available to ensure that entities that are ineligible for the priority periods are able to receive assistance following the two 14-day priority periods. A set-aside of $2 billion is also reserved for entities with 50 or fewer employees. Eligible individuals or entities seeking to participate in the shuttered venue grant program should contact the SBA. This is a new program and will take time for the SBA to launch.
Other Business Impact Areas of the $900 Billion Bill
- Employee Retention Credits extended to March 31st, 2021 and this credit goes from 50% to 70% up to $10,000 of wages per employee per quarter
- FFCRA – Mandatory paid leave sunsets on December 31st, 2020 however employers who choose to continue paying the leave will still be able to take the credit through March 31st, 2021 on COVID wages paid
- Provides clarity that expenses that have been paid with the proceeds of a forgiven PPP loan are deductible
- Tax credit for unemployed individuals – if you have to close your business due to testing positive for COVID, as a self employed individual you can file for a tax credit for your 2020 tax return. Be sure to retain information/proof of positive COVID test.
- Payroll tax repayment was originally due April 30 and is now due on December 31, 2021
- $15 billion to cover airline salaries and benefits which will last until the end of March
According to an overview provided by US Representative Colin Peterson’s Office: This bill is allocating $26 billion to spend on COVID relief for nutrition assistance and agriculture and rural programs. Half of that funding, $13 billion, was provided to the House Agriculture and the House Education & Labor Committees to provide nutrition assistance. The other $13 billion went to agricultural assistance and programs. Of that $13 billion, $300 million was provided to the Commerce Department to operate a program to assist the fisheries industry.
We anticipate additional information being released by the USDA in the coming days. You can read the entire bill here. For more on Minnesota-specific impacts, please read here.
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