COVID Relief Package

What Does it Mean for You?

The long-overdue COVID Relief Package is finally here. Although we don’t have all the details just yet below are the main provisions of the Bill that will substantially impact our clients.

  • Stimulus checks: There will be a second round of stimulus checks, set at $600 per individual who qualified for the $1,200 checks the first time. $600 will be available per child for a family. The income phase-out will be similar to the first round from $75,000 to $99,000 for individuals.
  • Unemployment insurance (UI): There will be $300 in weekly enhanced UI benefits for 11 weeks after the $600 in weekly benefits from the CARES Act expired at the end of July. Pandemic Unemployment Assistance (PUA), which provides unemployment insurance for gig workers, and Pandemic Emergency Unemployment Compensation (PEUC), which extends unemployment benefits for up to 13 weeks, will also both be extended 11 weeks after it was set to expire December 26th.
  • Small business aid: $325 billion in additional small business support, including $284 billion for the Paycheck Protection Program (PPP). Some businesses are eligible for a second round of the PPP and there are modifications to better serve independent restaurants. $15 billion in small business aid is dedicated for live venues, independent movie theaters, and cultural institutions. There also is $20 billion for targeted Economic Injury Disaster Loan (EIDL) Grants.
  • PPP deductibility: There is a technical fix to the CARES Act that explicitly states that businesses can deduct expenses that were paid for by PPP funds, something that the Treasury and IRS prohibited. The legislative text has not been released, but there may be a few restrictions on which businesses are qualified to deduct the expenses.
  • Business meal tax deduction: 100 percent tax deduction of business meals for two years. 
  • Other Covid-19 tax provisions: There is an extension and expansion of the Employee Retention Tax Credit (ERTC), an extension of a payroll tax subsidy for employers offering workers paid sick leave and basing the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) on 2019 income.  
  • Rental assistance: $25 billion in emergency rental assistance and the extension of the federal eviction moratorium through January.
  • Tax extenders: There will be a tax extenders package, although the details of the provisions have not yet been publicly released. What is known so far is that clean energy tax credits will be extended and the excise tax cuts for alcohol producers are set to be permanently extended. 

Stay tuned, more to come as we get further guidance.