On Wednesday, March 25, the White House and the Senate reached agreement on an estimated $2 trillion coronavirus stimulus bill. It is the third step in a wave of legislation designed to provide relief to the millions of American citizens and businesses impacted by the coronavirus. Earlier legislation included an $8.3 billion bill to fund vaccine development efforts, as well as the passage of the Families First Coronavirus Response Act to provide expanded paid leave.
This latest round of legislation, which lawmakers are currently working to finalize, will provide direct payments to many Americans, expand unemployment insurance, offer loans for small and large businesses, and provide additional resources to an overwhelmed health care industry.
The Senate is expected to vote on the bill later on Wednesday. The House is expected to vote on Thursday.
While the final provisions of the bill are still in development, here is what we know so far about what is included:
- One-time checks of $1,200 for people making up to $75,000 a year and $2,400 for couples making up to $150,000 a year, with an additional $500 per child. Individuals with little or no tax liability would receive the same amount. Payments would decrease for those making more than those amounts, with an income cap of $99,000 for individuals and $198,000 for couples.
- A broad expansion in unemployment benefits, which would extend to freelancers, gig workers, and others who typically would not qualify. It would also increase current unemployment assistance by $600 a week for four months.
- Creation of an employee retention tax credit to incentivize businesses to keep workers on the payroll.
- An estimated $350 billion in assistance for small businesses in an effort to avoid mass layoffs of workers.
- An estimated $500 billion in corporate aid, including $25 billion in direct financial aid to struggling airlines and $4 billion for air cargo carriers. The Treasury Secretary will have authority to make direct loans from a portion of these funds, with oversight from a newly-created inspector general and oversight board.
- A ban on stock buybacks for companies receiving a government loan from the stimulus package. The ban would last the term of the government assistance plus one year.
- An estimated $130 billion investment in the health care system, as well as $150 billion in stimulus funds for state and local governments struggling with skyrocketing coronavirus-related costs.
- An estimated $30 billion in emergency education funding and $25 billion in emergency transit funding.
In other news, the IRS has posted a frequently asked questions page on its website regarding the delay in tax filing and payments until July 15. These FAQs attempt to clear up some of the confusion that has arisen from this unprecedented change to the usual tax filing process. You can access the FAQs here.
Kreischer Miller will continue to provide updates as additional tax, legislative, and other COVID-19 related business developments emerge. We are also regularly updating our COVID-19 Resource Center, which you can access at any time here. In the meantime, if you have any questions about these or any other matters, please do not hesitate to contact your Kreischer Miller professional or any member of our team.
Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.