Update, 12/27: President Trump has now signed this bill into law.
Update, 12/22: President Trump is threatening to veto this bill unless the stimulus is raised to $2,000 per person, among several other changes he is requesting.
If he vetoes it, Congress can still override the veto with 2/3rds voting to pass the bill as is. If members keep their original vote, they would be able to override the veto. What do you think will happen?
— Donald J. Trump (@realDonaldTrump) December 23, 2020
Update, 12/21: This has been passed by the House 359-53 and by the Senate 92-6. It will now be sent to President Trump to be signed into law!
The House and Senate are now voting on $900 billion in Coronavirus stimulus benefits. It is expected to pass tonight and President Trump should sign it into law.
You can read through the 5,593 pages of it here, but here are some of the things that it will do:
- Stimulus checks of $600 per adult and per child.
- This will set the government back about $166 billion. The checks will be phased out for single filers making more than $75,000 and married filers making more than $150,000 AGI. That amount is phased out at a rate of $5 per $100 of income until a single filer makes $87,000 or a married couple without children makes $174,000, at which point it is completely phased out. The phaseout with children will be $12,000 higher per child, so a couple with 2 kids will phase out completely at $198,000. A couple with 4 kids will phase out completely at $222,000.
- Don’t forget that if your income drops on your 2020 tax return, or if you had a child in 2020, you can still claim additional funds from the March stimulus and for this stimulus on your 2020 tax return!
- Joint returns, where one filer is not a US citizen or resident, will now be eligible for stimulus checks. This is retroactive to the March stimulus as well. Only legal residents will get stimulus funds.
- Unemployment benefits of $300 per week for up to 11 weeks, on top of state benefits will be funded with $120 billion. These will not only cover regular employees, but also gig economy and other self-employed workers who lose work due to coronavirus. This will run through 3/14/21. Also extended through March 14 for up to 50 weeks are Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs for assistance after state benefits run out. Employers will have to inform states of employees refusing an employment offer.
- A federal moratorium on evictions will be extended from 12/31/20 to 1/31/21. $25 billion will be funded for people to use to pay past due and future rent or utilities payments.
- PPP forgivable loans have been funded with an additional $284 billion. 501(c)6 nonprofits are now eligible for PPP loans. To qualify, a company must make a good faith certification that they need the loan based on current economic conditions. They can get a loan of 2.5 times the monthly payroll, capped at $20,833 in funding per employee and can spend it over 24 weeks with at least 60% going towards payroll. If they didn’t take the full PPP previously, they can claim it now. Allowable expenses now include supplier costs, PPE, and property damage due to looting. If they are taking a 2nd PPP loan they must demonstrate a loss of 25% of greater in any quarter of 2020 as compared to the same quarter in 2019.
- If you received forgiveness on a PPP loan, you can deduct the expenses paid with that loan.
- You no longer have to deduct EIDL grants from PPP forgiveness.
- Loans under $150,000 can be forgiven using a 1 page form.
- Accommodation and food establishments can take a forgivable loan of 3.5 times monthly payroll.
- Employee Retention Tax Credit can now be taken by employers in addition to PPP loans, whereas previously you had to choose one or the other. The refundable payroll tax credit is increased from a cap of $5,000 to $14,000 by changing the calculation from 50% of wages paid up to $10,000 to 70% of wages paid up to $10,000 for any quarter.
- EIDL grants for an emergency grant for small businesses of up to $10,000 in low-income neighborhoods.
- Earned Income Tax Credits and Child Tax Credits will allow you to use your choice of 2019 or 2020 earned income for qualification on your 2020 tax return, though you will need to include unemployment income when calculating your 2020 AGI.
- Business meals will be 100% deductible in 2021 and 2022.
- Vaccines will be funded with $69 billion to make them available for free to those who need it.
- Food stamps will be funded with $13 billion and will give 15% more benefits from 1/1/21-6/30/21.
- K-12 schools will receive $54 billion in funding, higher education will get $23 billion, and child care providers will get $10 billion. Child care assistance will be given to essential workers.
- Airlines will get $15 billion for 4 months of “payroll assistance.” That comes out to $375,000 of assistance per furloughed job!
- Amtrak, airports, buses, state highways, and other transportation also will receive bailouts, as will live event venues like theaters and museums.
- $7 billion to increase broadband access.
- The post office gets a $10 billion grant.
- State and local governments can spend their 2020 CARES funding throughout 2021.
- $1.3 billion in federal student loan forgiveness for historically Black colleges.
Which of these items will you benefit from?