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  • COVID-19 Emergency Relief Package- Detailed Summary of New Agreement

     
    Unemployment Insurance - $120 Billion:
     
    In this relief bill, $120 billion was secured in additional federal funding for struggling workers nationwide by extending the historic unemployment insurance expansion established by the CARES Act, through March 14, 2021. Specifically, this bill:
    • Extends the Pandemic Unemployment Assistance (PUA) program, which provides continued unemployment assistance to the self-employed, freelancers, gig workers, part-time workers and other individuals in non-traditional employment. It also increases the number of weeks of PUA benefits an individual may claim, from 39 to 50. 
    • Provides full federal financing of state Shared Work programs, allowing employers to avoid layoffs during the downturn by connecting their employees who are working reduced hours with partial unemployment compensation, through March 14, 2021. 
    Tax Provisions:
    • Extension and Expansion of the Employee Retention Tax Credit (ERTC): The bill importantly extends and expands the refundable Employee Retention Tax Credit (ERTC), which was established in the CARES Act. The extension of this tax credit, through July 1, 2021, will help keep additional U.S. workers on payroll and more small businesses and nonprofits across the country afloat. Specifically, this legislation, among other changes: 
      • Increases the credit rate, from 50% to 70%; 
      • Raises the limit on per-employee creditable wages from $10,000 for the year, to $10,000 for each quarter; 
      • Expands eligibility for the credit by reducing the required year-over-year decline in gross receipts from 50% to 20%; and 
      • Modifies the threshold for treatment as a ‘large employer’ by increasing the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees.
    • Clarification of Tax Treatment of Paycheck Protection Program Loans: The bill specifies that forgiven Paycheck Protection Program (PPP) loans will not be included in taxable income. It also clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan, effective as of the date of enactment of the CARES Act and applicable to subsequent PPP loans. This same tax treatment also applies to EIDL grants and certain loans and loan repayment assistance.  
    • Extension of Paid Leave Credits: The bill extends the refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act, through March 31, 2021. The bill also allows self-employed individuals to use their average daily self-employment income from 2019, rather than 2020, for purposes of computing these credits.  
    Small Business - $325 Billion:
    This bill includes $284 billion for the Paycheck Protection Program (PPP) and extends PPP through March 31, 2021. Changes to PPP include:
    • Provides a second PPP forgivable loan for the hardest-hit small businesses and non-profits with 300 or fewer employees and that can demonstrate a loss of 25% of gross receipts in any quarter during 2020 when compared to the same quarter in 2019;
    • Creates a dedicated $15 billion set-aside for lending through community financial institutions, including Community Development Financial Institutions and Minority Depository Institutions to increase access for minority-owned and other underserved small businesses and nonprofits;
    • Creates a set-aside for very small businesses with 10 or fewer employees and for small businesses located in distressed areas;
    • Expands PPP eligibility for more critical access hospitals, local newspapers and TV and radio broadcasters, housing cooperatives, and 501(c)(6) nonprofits, including tourism promotion organizations and local chambers of commerce;
    • Allows for small businesses in the restaurant and hospitality industries to receive larger awards of 3.5 times average total monthly payroll, rather than 2.5 times;
    • Adds PPE expenses, costs associated with outdoor dining, and supplier costs as eligible and forgivable expenses;
    • Simplifies the forgiveness process for loans of $150,000 and less;
    • Repeals the requirement of deducting an EIDL Advance from the PPP forgiveness amount.
    EIDL Grant Program - $20 Billion:
     
    This bill includes $20 billion for EIDL Advance grants. Small businesses and nonprofits in low-income communities are eligible to receive $10,000 grants. Any small businesses and nonprofits in low-income communities that received an EIDL Advance previously are also eligible to receive the full $10,000 if their award was less in the first round of grants.
     
    Grants for Shuttered Venue Operators - $15 Billion:
     
    The bill provides $15 billion for SBA grants up to $10 million to live venues, independent movie theaters, and cultural institutions to address the economic effects of the pandemic. Grants can be used to cover expenses such as payroll costs, rent, utilities, and personal protective equipment. Two priority periods are established to ensure the hardest hit entities have dedicated access to assistance for the first 28 days of the program, while a reserve fund is made available ensure entities that are ineligible for the priority periods are able to receive assistance following the two 14-day priority periods. A set-aside of $2 billion is also reserved for entities with 50 or fewer employees. The program is authorized to make supplemental grants equal to 50 percent of the initial grant. 
     
    Transportation Authorizations - $18 Billion:
     
    This bill includes $45 billion in transportation funding to provide relief to transit agencies, airlines and airline contractors, state transportation agencies, airports, Amtrak, and private motorcoaches, school buses, and ferries, which have all been significantly impacted by coronavirus as travelers are urged to stay home and demand is down. Of this amount, the breakdown is as follows:
    • Airline Payroll Support Program - $15 billion to renew the CARES Act program which will keep workers on payroll without furloughs or reducing pay rates and benefits until March 31, 2021, with requirements for airlines to rehire workers laid off after Sept. 30, 2020, as well as stipulations preventing airlines from using funds for stock buybacks, executive bonuses, or for utilizing the funds in anything other than supporting workers. 
    • Airline Contractors Payroll Support – this program will receive an additional $1 billion as part of the extension of the Payroll Support Program. And these workers have the additional protection of relief from furlough until all of their employers’ PSP funds are expended.  
    • Buses and U.S. Vessels – Nationwide, buses will receive $2 billion in relief, which will benefit private motorcoaches, school buses, and U.S.-flagged small passenger vessels.  
    • FMCSA - This provision expands the time period in which FMCSA grant funds can be expended by states if they’ve faced a hardship because of COVID-19. 
    Content courtesy of the Visalia Chamber of Commerce. You can find the link to their website here.