$900 Billion Federal Covid-19 Relief Package Becomes Law

Here are some key provisions of the relief package:

Direct Payments to Taxpayers

• Single adults with an adjusted gross income of $75,000 or less will get a one-time payment of $600.
• Married couples with no children earning $150,000 or less will receive a total of $1,200.
• Those with children will get an and an additional $600 per child.

Relief for Small and Medium-Sized Businesses

The relief package provides additional funding of $284 billion for loans in the Paycheck Protection Program (“PPP”) and also includes an additional $20 billion in funding for Economic Injury Disaster Loans.

The new law clarifies that businesses that received loans under PPP would be able to take tax deductions for costs and expenses which formed the basis for loans forgiven for payment under the CARES Act.  This clarification reverses the position previously taken by the Internal Revenue Service (IRS) regarding whether such costs and expenses could be taken as tax deductions.

The new law also added some additional categories of costs and expenses for loan forgiveness under the CARES Act, such as:

• Covered operational expenditures: payments for software or cloud computing services that facilitate business operations, product or service delivery, the processing, payment or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.
• Covered property damage: costs related to property damage and vandalism or looting due to public disturbances that took place in 2020 which were not covered by insurance or other compensation.
• Covered supplier costs: expenses incurred by a borrower under a contract or order in effect before the date the loan proceeds under PPP were disbursed for the supply of goods that are essential to the business’s operations.
• Covered worker protection equipment: costs of personal protective equipment incurred by the business to comply with governmental rules or regulations.

Additionally, tax credits would be extended for employers offering paid sick leave or keeping workers on the payroll, allowing recipients of certain tax credits to qualify based on their 2019 incomes.

In an effort to help the struggling restaurant industry, the bill would allow 100% tax deductions for business meals.

Extension of Unemployment Compensation Benefits

Individuals who are not working, working part-time, or are too sick to work will receive $300 per week from the federal government through March 14, 2021 in addition to state benefits.

The relief package also extends to 50 weeks the amount of time for which workers may claim benefits through both state and federal programs.

As with the CARES Act, the benefits will cover those who do not meet the definition of “employee” such as independent contractors, gig workers and the self-employed.

The bill extends for 11 weeks Pandemic Unemployment Assistance for those who do not qualify for state unemployment benefits, such as independent contractors, gig workers and the self-employed.

Also included is an additional $100-a-week subsidy for employees who have both wage and self-employment income but whose basic unemployment benefits do not take into account their self-employment income.

Evictions and Rental Assistance

The relief package extends the federal moratorium on residential evictions through the end of January 2021.

The package also provides $25 billion of assistance to tenants in arrears on their rent, to be administered by the states.  Landlords and property owners can apply for the rental assistance on behalf of tenants meeting the eligibility requirements, generally those who make less than 80% of median income in their area, have at least 1 person in their households who has lost a job and can demonstrate they are at risk of losing their home.

Covid-19 Testing and Vaccine Distribution

The relief package also provides $22.4 billion to the states for testing, tracing and Covid-19 mitigation programs and additional funds for vaccine and therapeutic distribution.

If you have questions about the new relief package, please feel free to contact us at info@nochumson.com and an attorney at Nochumson P.C. will immediately reach out to you to schedule a free consultation.