Last evening, the House released the text of the new stimulus bill it had passed–all 5,593 glorious pages. It is a whopper of a bill, with provisions for healthcare, schools, the arts, nutrition, rental assistance and of course the $600 stimulus payment. With thanks to Kaitlyn MacLeod–a real team player–below is an overview of the provisions most pertinent to employers. Please note, there are many details contained in the bill that may apply to your circumstances and not included here:
Unemployment:
- Extension of the Cares Act to March 14, 2021. The Pandemic Unemployment Assistance will be extended, and no pandemic unemployment assistance shall be payable for any week beginning after April 5, 2021.
- Unemployment can now be earned for up to 50 weeks.
- Anyone who received overpayments of the PEUC will be required to repay it to the state, unless the state waives this overpayment.
- From weeks from December 26, 2020 to March 14, 2021, the employee will be able to earn an additional $300 per week in unemployment benefits.
- The eligibility for pandemic unemployment compensation was extended to 24 weeks in total.
- An employee now needs to provide documentation to substantiate employment or self-employment or the planned commencement of employment or self-employment not later than 21 days after the later of the date the individual submits an applicable for pandemic unemployment assistance.
- Return to Work Reporting Requirement: Every state participant in an agreement with the federal government must have a method to address circumstances where employees refuse to return to work or accept an offer of suitable work without good cause, for unemployment methods. There needs to be a reporting method for employers, and notice provided to claiming about return to work laws.
Families First Corona Response Act (FFCRA):
- Optional extension to March 31, 2021.
- As of January 1, 2021, covered employers may voluntarily provide emergency paid sick leave or emergency paid FMLA Leave under FFCRA (as adopted earlier this year) and take the tax credit associated with this leave.
- If an employee used 80 hours of paid sick leave (EPSL) earlier this year, for instance, they technically would not have had access to a new EPSL bucket on January 1, 2021. Therefore, the employer cannot take the credit for additional EPSL provided in 2021.
COVID-19-related Tax Relief Act of 2020
- The “income tax relief” will be extended to December 31, 2021, from April 30, 2021.
Original PPP Loans
- No amount received from PPP will be included in the gross income of the eligible recipient by reasons of forgiveness.
- Any amount excluded from income for partnerships or S Corps will be treated as tax exempt income for purposes of Section 705 and 1366 of IRC.
Subsequent PPP Loans & Grants:
- No amount received will be included in the gross income of an eligible entity by reason of forgiveness of indebtedness.
- Clarification of Tax Treatment of Certain Loan Forgiveness and other business financial assistance: US Treasury Program Management Authority, no amount shall be included in the gross income of the borrower by reason of forgiveness.
- Emergency EIDL Grants and Targeted EIDL Advances: Any advances described in section 1110€ of the CARES Act or under section 331 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act shall not be included in the gross income of the person that receives such advance or funding.
- Subsidy for certain loan payments – any payment described in Section 112c of the CARES Act shall not be included in the gross income of the person on whose behalf such payment is made.
- Grants for Shuttered Venue Operators: any grant made under section 324 of Economic Aid to Hard Hit Small Businesses shall not be included in the gross income of the person that receives such grant.
The bill is expected to be passed by the Senate and then to the President’s desk for signature before Christmas. We will continue to unpack this bill and any regulations that arise from it. Please call with any questions. We can help.