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As 2020 draws to an end, congress finally reached a deal on an approximately $900 billion relief bill this past weekend. This is welcome news to businesses and individuals who continue to struggle with the impact of the pandemic. The new legislation sees aid to small businesses, extended job benefits, relief checks for individuals and families, and much-needed financial provision for vaccine distribution.
Here’s an overview of the bill and points of further discussion:
Relief for businesses
Lawmakers said they reserved some of the PPP funds for “very small” businesses, as well as lending through community-based lenders and minority depository institutions. The bill includes:
- More than $284 billion for first and second forgivable Paycheck Protection Program (PPP) loans.
- Modifications to the PPP program to better serve small businesses, nonprofits, and independent restaurants, as well as expanded PPP eligibility for nonprofits and news outlets.
- A provision that allows businesses that received PPP loans and had them forgiven to deduct the costs covered by those loans on their federal tax returns.
- $15 billion for independent movie theaters and cultural institutions.
- $20 billion for targeted grants through the Economic Injury Disaster Loans program.
- A tax deduction for corporate meal expenses as a way to revive the restaurant industry.
- A tax credit to support employers offering paid sick leave.
Congress will extend unemployment benefits of up to $300 per week, which could begin as soon as December 27th and continue through March 14, 2021. This extension will include contract and gig workers, whose benefits were set to expire at the end of the year.
Additional stimulus checks
The legislation includes another round of $600 stimulus checks per person, including adults and children. That means a family of four would receive $2,400, up to an income threshold of $75,000. The payment decreases for people who earn more than that up to $99,000. Above that, no relief is provided.
Rental assistance and eviction pauses
The program extends the moratorium on evictions until January 31, 2021, from December 31, 2020. This can be extended by the incoming Biden administration. It includes $25 billion in emergency assistance to renters, however, it is unclear how that will be distributed.
Funding for vaccine distribution
The bill also includes $20 billion for the purchase of vaccines, making them available to the public at no cost. It also provides $8 billion for vaccine distribution and includes $20 billion to assist states with testing.
$82 billion will be made available to schools (including Universities) to help cover HVAC repair and replacement to reduce the risk of coronavirus spread as they reopen classrooms.
- The package includes legislation to end surprise billing for emergency and scheduled care; $13 billion in increased food stamps and nutrition benefits; and $7 billion to increase access to broadband.
- $45 billion for transportation, including $16 billion for another round of airline employee and contractor payroll support; $14 billion for transit; $10 billion for highways; $2 billion for intercity buses; $2 billion for airports; and $1 billion for Amtrak.
One of the most contentious parts of the stimulus discussion is the protection of companies from lawsuits over coronavirus outbreaks in the workplace, essentially giving businesses legal immunity. For many small businesses, defending lawsuits of this nature could push them into bankruptcy regardless of their liability. This is a hot button issue that is still being debated in congress and is not part of the bill.
No new assistance to state and local governments
The legislation does not include additional money for state and local governments. State governors and local mayors have been facing budget shortfalls and warning about the hard choices they may be forced to make without federal assistance. States that rely heavily on the tourism or energy industries are among those that have been hit hardest and are warning of tax increases, public-sector layoffs or spending cuts to public programs.
Negotiators are extending the deadline for states and cities to use unspent money approved for them by the Cares Act, giving governments until year’s end before the money must be returned.
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