A much anticipated Coronavirus relief act has been released by the Senate. The Health, Economic Assistance, Liability Protection and Schools Act (HEALS Act), is the proposal set forth by Senate Republicans for the much anticipated "Phase 4" economic relief. Although this $1 trillion relief bill is significantly less than the $3 trillion bill proposed by the House of Representatives, discussions are underway to bridge the gaps in order to quickly get additional relief to taxpayers and businesses.

Highlights of the HEALS Act as unveiled by the Senate include:

Changes to Unemployment Benefits:The additional $600 is set to expire on July 31, 2020. The HEALS act replaces this benefit with two phases.
  • Additional $200 per week for August 1, 2020-September 30, 2020.
  • In October, unemployment benefits will include a payment that, when combined with the state unemployment insurance payment of up to $500, would replace 70% of lost wages.

Stimulus Payments: This will be similar to the first round of stimulus payments where taxpayers (up to certain income limitations) will receive:
  • $1,200 ($2,400 for married taxpayers)
  • $500 per dependent. Unlike the first round, the Act would provide $500 for all eligible dependents (up to three per household) rather than only those under age 17. The last round did not include adult dependents, college students, etc.

Expansion of the Paycheck Protection Program:
  • The Act provides $190 billion for companies seeking first-time or "Second Draw" PPP loans.
  • Second time loans are restricted to smaller, privately-held businesses that have sufffered a 50 percent reduction in gross revenue.
  • $25 billion of the $190 billion would be earmarked for companies with 10 or less employees.
  • Many of the issues in attaining forgiveness are addressed in the Act.
  • Borrowers can choose their own 8-week period.
  • Forgivable expenses have been broadened to include worker protection costs (masks, protective shields, etc.).

Employee Hiring and Retention Credit:
  • Applicable percentage of qualified wages increases to 65%.
  • Decline in gross receipts threshold decreases from 50% to 25%.
  • Qualified wages increases to $10,000 per quarter, versus per year (limited to $30,000 per year).
  • PPP recipients can claim the credit.

Work Opportunity Tax Credit:
  • The HEALS Act expands the WOTC adding 2020 COVID-19 unemployment recipients as a target group.
  • The credit for this targeted group is 50% of the first $10,000 of qualified first year wages.

There are additional items included in the Act such as a Safe and Healthy Workplace Tax Credit, increased business meal deduction allowance, and liability protection that will limit legal exposure that organizations could face from lawsuits resulting from Coronavirus damages. However, much negotiation will take place in the coming days and we anticipate several adjustments to the bill before an agreement is reached. We will keep you posted as the lawmakers are working closer to a final relief package, at which time we will be ready to assist you in maximizing all relevant relief opportunities.