Payroll Systems » Congress Passes New COVID-19 Relief Package: Here’s What We Know

Congress Passes New COVID-19 Relief Package: Here’s What We Know

On December 20, 2020, Senate Leadership announced the approval of a $900 billion economic relief package to deliver relief and emergency aid during the ongoing pandemic as cases continue to surge across the country. This bill has been months in the making and is the first major piece of legislation since congress passed the CARES Act and the Families First Coronavirus Response Act back in late March and early April of 2020.

The new package includes some of the following:

A second round of stimulus payments- Originally, the second round of stimulus checks were set to $600 per adult, and an additional $600 per child. The payments would be distributed either via paper check or through direct deposit- the same way the first round of payments were issued. Anyone earning more than $99,000 in the 2019 tax year will not be receiving a check. However, as of December 28, 2020, the U.S. House of Representatives voted to increase the payments to $2,000 per adult. The increase is currently pending as it needs to be approved by the Senate in order to move forward.

Unemployment benefits extension– $300 supplemental payment per unemployed worker through March 2021. The package would also extend any program that expands unemployment insurance eligibility due to the pandemic.

Supplemental Nutrition Assistance Program (SNAP) expansion– $13 billion will be invested in new and improved benefits for SNAP.

Paycheck Protection Program (PPP) additional funding- $284 billion for the PPP which was originally included in the CARES act and was designed to provide small businesses with loans to stay afloat through the pandemic. This second round of loans is meant for the smaller and harder-hit businesses that have had a 25% loss in revenue. There is a maximum limit amount of $2 million for businesses under 300 people.

Funding for schools and colleges- $82 billion total with $22.7 billion allocated for colleges and universities to assist with decreased tuition revenue and $54.3 billion for elementary and secondary education. Funding will be given to states to distribute to schools according to local demands.

Live event venue funding- $15 billion in grant programs for live venues, theatres & museums that have lost 25% in revenue to help with their payroll costs, rent, utilities, and PPE purchasing.

Transportation funding- $45 billion in support towards airlines and related businesses, state highways, and Amtrack.

Funding for various public health measures- $69 billion towards the purchase and distribution of COVID-19 vaccines as well as test-and-trace programs on a state level.

FFCRA Leave included– The provision extends the refundable payroll tax credits for paid sick and family leave, enacted in the Families First Coronavirus Response Act, through the end of March 2021. It also modifies the tax credits so that they apply as if the corresponding employer mandates were extended through the end of March 2021. This provision is effective as if included in FFCRA.

Payroll Tax Deferral Repayment: On August 8, 2020, the President of the United States issued a memorandum to allow employers to defer withholding employees’ share of social security taxes or the railroad retirement tax-equivalent from September 1, 2020, through December 31, 2020, and required employers to increase withholding and pay the deferred amounts from wages and compensation paid between January 1, 2021, and April 31, 2021. The repayment deadline is now extended to December 31, 2021.

6-month expansion of Employee Retention Tax Credit: Up to $10,000 per employee per quarter, increases the credit rate from 50 percent to 70 percent of qualified wages; Expands eligibility for the credit by reducing the required year-over-year gross receipts to 20 percent from 50 percent; Eligible for business with up to 500 employees; and will allow new employers who were not in existence for all or part of 2019 to be able to claim the credit.

This relief bill was signed by President Trump as of Sunday, December 27th. However, the conversation about what else is needed is still ongoing amongst lawmakers as the pandemic continues. It is also still unclear as to how long some of these measures will be in place. As this bill was approved in an effort to avoid another government shutdown, amendments and additions are still highly possible in 2021.

Is there anything Payroll Systems can help you with as you accommodate rapid legislation changes? Reach out and talk to us about the easy-to-scale solutions you need for your business.