Trump Signs Consolidated Appropriations Act 2021 to Expand COVID Relief Programs
December 29, 2020
On December 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021 (the “Act”) into law. The Act includes extension and expansion of programs and relief created by the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA). The following discussion highlights key provisions of the Act.
Paycheck Protection Program – The Act clarifies that businesses that receive PPP loans may take tax deductions for the expenses covered by the forgiven loans. The Act provides an additional $284 billion for the Paycheck Protection Program (“PPP”), which provides eligible businesses with forgivable loans. The Act expanded eligibility to include all nonprofits. Additionally, small businesses that have already received a PPP loan may apply for a second loan if they have 300 or fewer employees and can demonstrate they experienced a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019. The Act also provides a simplified forgiveness process for PPP loans under $150,000. Borrowers will need to complete a one-page certification attesting they complied with the program requirements and provide additional information.
Employee Retention Credit – The Act expands eligibility for the Employee Retention Credit established by the CARES Act to include borrowers of PPP loans. The Act also changes how the credit is computed. For 2020, the CARES Act allowed an employer to claim a credit of 50% of qualified wages. For 2021, the Act amends the CARES Act to increase the credit from 50% to 70%.
Employer Credit for Paid Sick Leave and Family Leave – The FFCRA provided a refundable payroll tax credit for the paid sick and family leave mandated by that statute. The new Act does not require employers to provide paid sick and family leave past December 31, 2020. However, the Act extends the tax credit to March 2021 for those employers who voluntarily offer paid sick and family leave to employees.
Unemployment Benefits – Under the Act, anyone who receives an unemployment benefit from a state may receive an additional $300 a week in federal benefits for 11 weeks, from the end of December through May 14, 2021. This is half the amount that was provided by the CARES Act, which provided federal benefits through the end of July 2020. In addition, the Act expands two federal pandemic unemployment programs, Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA), which were set to expire at the end of the month. PEUC extends eligibility for unemployment benefits by an additional 13 weeks, and PUA provides unemployment benefits to independent contractors, gig workers, and the self-employed.
Individual Payments – The Act provides that individuals will receive another round of stimulus payments. Individuals will receive $600 and eligible individuals filing a joint return will receive $1,200. In addition, individuals will receive $600 per child. The payment amount begins to reduce for individuals with an adjusted gross income over $75,000 and joint filers with an adjusted gross income over $150,000. However, the House plans to vote on a measure that would increase the stimulus payments to $2,000 per eligible individual.
Housing – The Act extends the federal eviction moratorium until January 31, 2021 and provides $25 billion in rental assistance to those who lost their source of income during the pandemic.
Miscellaneous – The Act also provides funding for childcare, schools, food assistance, health care, COVID-19 vaccinations, the U.S. Postal Service, expanding broadband access and additional programs to help stimulate the country.
Noticeably missing from the Act is limited COVID-19 liability for businesses. Republican legislators supported limiting COVID-19 liability to protect businesses, schools, hospitals, and other entities from suit by those who claim the entities caused them to contract the virus. However, this limited liability was not ultimately included in the Act.
As always, the lawyers at RCO Law stand ready to counsel you on COVID 19-related business and employment issues.