Congress Reaches Agreement on COVID Relief Package

The House and Senate recently passed a $900-billion pandemic relief package aimed at boosting the U.S. economy into the early spring, which is combined with $1.4 trillion to fund regular government operations for the rest of the fiscal year. President Donald J. Trump (R) signed the bill into law on Dec. 27.

The pandemic part of the bill includes help for small businesses and the unemployed, and it also includes direct payments to most Americans. Other aid offered in the legislation provides funding for vaccine distribution, food assistance, tax breaks and money for education and child care.

Aside from stimulus, TRSA is continuing its work with the U.S. Centers for Disease Control and Prevention (CDC) and each state to raise the linen, uniform and facility services industry’s priority in receiving a COVID vaccine.

The provisions aimed at the fallout from the coronavirus represent the second-largest economic rescue package in American history, behind the $1.8-trillion virus relief package that was signed into law just nine months ago. It surpasses the $787-billion stimulus passed in response to the financial crisis in 2009.

What the bill does:

Direct Payments

• The bill provides $600 in one-time direct payments to individuals and $600 per child. The payments would be phased out for individuals over a certain income threshold. Payments could begin flowing quickly through the Internal Revenue Service, which already had set up a system to distribute $1,200 payments in the stimulus bill passed in March.

Unemployment Insurance

• Federal unemployment insurance benefits will be extended for 10 weeks through mid-March, with each week supplemented by a $300 payment, similar to the extra $600 supplement that expired at the end of July.
• It includes people receiving state unemployment benefits as well as those receiving Pandemic Unemployment Assistance, the pandemic program that provided jobless benefits to those not traditionally eligible like gig workers and the self-employed.
• Pandemic Emergency Unemployment Compensation, which provided up to 13 additional weeks of jobless benefits to those who had exhausted their regular state benefits, was extended as well.

Help for Companies and Airlines

• The aid package includes $284 billion for the Paycheck Protection Program (PPP) that was created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That program’s loans to firms with fewer than 500 employees can be fully forgiven if companies keep people on their payroll.
• The legislation clarifies that business owners can write-off expenses paid for with forgiven PPP loans, giving small companies a tax break that could amount to more than $100 billion. The legislation would override an IRS decision that says businesses can’t claim deductions on costs, such as rent and wages, paid for with tax-free PPP money.
• It also includes $15 billion to reinstate payroll reimbursements to airlines, which expired two months ago, as well as $1 billion for airline contractors.

Tax Breaks

• The legislation includes an expansion of the business meals deduction.
• It also includes a renewal of the employee retention tax credit for businesses that keep workers on their payrolls. The break gives companies an additional incentive to keep people employed as many firms still face revenue downturns but have run out of PPP money or never qualified for it.
• The package makes changes to the earned income tax credit and the child tax credit to make it available to people who lost wages or jobs during the pandemic, as well as an expanded Low Income Housing Tax Credit to boost construction of housing for low-income families.
• The legislation would make permanent an excise tax break for beer brewers, wine makers and distillers. In addition, other expiring tax credits, including some for mortgage interest premiums and tax credits to help businesses in low-income communities.

Housing, Education and Other Provisions

• The measure contains $25 billion for emergency rental assistance, and it extends the CARES Act’s eviction moratorium until Jan. 31.
• Other key funding provisions include funds for virus testing, tracing and vaccine development and distribution. It also has $82 billion for education funding, as well as $7 billion for broadband, $10 billion to support childcare providers and funds for the U.S. Postal Service. It provides $13 billion for nutrition assistance.