In an effort to boost the economy and provide relief from the impact that COVID-19 continues to have on Americans, Congress passed a $900 billion relief package and sent to the President for signature. If signed into legislation, this would be the second largest federal stimulus package after the $2 trillion CARES Act passed in March 2020. However, President Trump has sent the bill back to Congress hoping to increase stimulus payments and remove what he believes is unnecessary spending.

Highlights of the highly anticipated bill as approved by Congress:

Stimulus Payments - Americans making less than $75,000 per year would receive a direct payment of $600 and an additional $600 per dependent child. Couples making less than $150,000 would receive $1,200. Income determination will be based on 2019 tax returns and the amount of the payment phases out for individuals making $75,000 to $100,000, with no payment for those who make over $100,000. Adult dependents (children age 17 or older and elderly dependents) are not included as recipients of the stimulus payments. The President is challenging this provision of the bill and pushing for a greater payment amount (up to $2,000 per taxpayer).

Enhanced Unemployment Benefits - If passed as is, jobless Americans would receive a $300 federal unemployment supplement each week for 11 weeks beginning at the end of December. Additional pandemic unemployment extensions are also included in the bill:
  • The Pandemic Unemployment Assistance program expands unemployment benefits to gig workers, freelancers, independent contractors and the self-employed.
  • The Pandemic Emergency Unemployment Compensation program provides an additional 13 weeks of payments to those who exhaust their regular state benefits.

Paycheck Protection Program - The bill would reopen the PPP, for which the program had previously stopped taking applications. Hard-hit small businesses will be able to apply for a second loan, with $12 billion designated for minority-owned and very small businesses. To qualify, businesses would need to have less than 300 employees and be able to demonstrate a loss in gross receipts of 25% or more. Additionally, the bill would allow for more expenses to qualify for forgiveness.

PPP and Deductibility of Business Expenses - The bill allows for a deduction of business expenses that were paid from forgiven PPP funds. Previously, the IRS stated that these expenses were not deductible, however the current bill clarifies that the intent of the original legislation does allow for a deduction.

Vaccine Funding - Over $8 billion of the relief package is earmarked for distribution of the COVID-19 vaccine. $20 billion will go toward the purchase of vaccines so they can be available at no charge for those who need it, and another $20 billion goes toward the states to assist with testing.

Business Meal Deduction - In an effort to provide relief to the struggling dining industry, the bill includes a temporary return of business meal deductions for 2021 and 2022. The deduction would include the full amount of meals, including beverages, provided at a restaurant.

There are several additional aspects of the bill such as rental assistance, nutrition assistance and funding for schools and childcare. We will keep you updated on the status of the bill and any revisions that may be incorporated.