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December 28, 2020

Government Assistance Update

On December 21st, Congress passed a $900 billion COVID-relief package and $1.4 trillion government funding package which will provide financial assistance to Americans in addition to securing federal funding through September 2021. It was then sent to the President’s desk where it was signed on Dec. 27th. Provided below is a list of the financial assistance programs contained in the $900 billion allocated for COVID relief.

  • Direct Payments
    • Economic relief stimulus checks of $600 for individuals making up to $75,000 per year. For couples making less than $150,000, they are eligible for $1,200 with an extra $600 for every dependent child under 17 years old. Individuals with an income of $87,000 or greater and couples with an income of $174,000 or greater are not eligible for this direct payment.  Payments will be based on 2019 taxes.
  • Payroll Tax Deferment
    • Individuals whose payroll tax has been deferred since September will be given until December 31st, 2021 to pay back the federal government.
  • Paid Leave
    • An extension of credits for paid sick and family leave under the second COVID relief package until March 31, 2021.
  • Unemployment Benefits
    • Extension of the Federal Pandemic Unemployment Compensation program through March 14, 2021, paying $300 per week for workers receiving UI
    • Extension for applicants of Pandemic Unemployment Assistance (PUA) to March 14, 2021. PUA will phase out on April 5, 2021.
    • Extension for applicants of Pandemic Emergency Unemployment Compensation (PEUC) to March 14. PEUC will phase out on April 5, 2021. Benefits will continue from the original 13 to 24 weeks ending on April 5, 2021.
    • Individuals may now claim benefits through the PEUC or PUA for up to 50 weeks.
    • An additional $100 per week for workers who have both waged and self-employment income but their UI benefit calculation does not take self-employment into account.
    • Requirement for documentation of employment rather than self-certification. States are required to verify applicant identity now.
    • States are allowed to opt for an extra benefit of $100 per week for up to 11 weeks through March 14, 2021, eligible for workers who have both wage and at least $5,000 of self-employment income in the most recent tax year.
  • Labor Provisions
    • Extends the Families First Coronavirus Response Act (FFCRA) refundable tax credit for mandated sick leave and who voluntarily provide emergency paid leave through March 31, 2021.
    • Extension of the CARES ACT employee retention tax credit (ERTC) from January 1, 2021 through June 30, 2021
      • Increases the credit rate from 50% to 70% of qualified wages
      • Reduces the required year-over-year gross receipts decline from 50% to 20% and allows employers to use prior quarter gross receipts for eligibility.
      • Increased the limit of creditable wages from $10,000 for the year to $10,000 for each quarter.
  • Small Business Provisions
    • $284.5 billion supplementing the Payment Protection Program (PPP) for first and second time loans.
      • Businesses may receive a second PPP loan if they have less than 300 employees and can demonstrate a revenue reduction of 25%
      • The maximum loan amount is now $2 million.
    • $20 billion for new Economic Injury Disaster Loan Grants for businesses in low-income communities
    • $3.5 billion for continued Small Business Administration debt relief payments
    • $2 billion for enhancements to Small Business Administration lending
    • Businesses that have received PPP loans will be able to take tax deductions for the expenses covered by forgiven loans
    • $12 billion for Community Development Financial Institutions and Minority Depository Institutions that provide credit and financial services to minority and low-income areas.
  • Broadband Benefits
    • $3.2 billion in benefits for the Emergency Broadband Benefit that provides $50 per month for broadband to low-income families.
  • Housing
    • $25 billion in emergency rental assistance.
    • CDC eviction moratorium is now extended until January 31, 2021.
    • Renters that qualify will receive assistance for rent, utility payments, and any unpaid rent/utility bills.
    • Households may receive assistance for up to 12 months with an additional 3 months which may be added to ensure the family remains housed.
  • Disaster Aid
    • 40% tax credit of wages capped at $6,000 per employee to employers in disaster zones. This will apply to wages paid without regard to services rendered.