Bipartisan Bill Extends Pandemic Relief Benefits with Modifications and Expansions

Strategic Insights -

The recent bipartisan bill, signed by President Trump, aims to alleviate the economic burden of small businesses and individuals affected by the pandemic. Although FFCRA Emergency Sick and Family Leave benefits are set to expire, a new tax credit encourages employers to provide flexible paid leave benefits through March 31, 2021. The bill extends a tax credit for family and medical leave benefits, provides additional funding for the Paycheck Protection Program (PPP), and allocates stimulus checks of up to $600 per person.

Key Takeaways:

  • FFCRA Emergency Sick and Family Leave benefits will expire as originally scheduled, but a tax credit encourages employers to continue providing flexible paid leave benefits.
  • The tax credit for family and medical leave benefits is extended through December 2025, initially provided by the Tax Cuts and Jobs Act of 2017.
  • PPP eligibility is expanded to include all nonprofits, including 501(c)(6) organizations, with an additional $284 billion allocated for disbursement.
  • Companies that received funds in 2020 may be eligible for a second loan, with some funds set aside for the smallest businesses and community-based lenders.
  • Individuals who received forgiveness on their loans will be allowed to deduct the costs covered by the loans on their federal tax returns.
  • Stimulus checks of up to $600 per person will issue, decreasing in size for individuals who earned more than $75,000 in 2019, and eliminated for those who earned more than $99,000.
  • Unemployment benefits and Pandemic Unemployment Assistance (PUA) are extended, with an additional $300 per week for each individual collecting paid through March 14.
  • PUA is extended for an additional 11 weeks for part-time and gig workers.
  • Health and Dependent Care Flexible Spending Account funds with balances may be rolled over from 2020 to 2021 and from 2021 to 2022.
  • Student Loan Repayment Benefits paid by employers in amounts up to $5,250 annually will remain excludable from income through December 31, 2025.
  • The CARES Act temporarily allowed employers to provide such benefits to employees through December 31, 2020.
  • Moratorium on Evictions is extended to January 31, with $25 billion in rental assistance included in the bill.

Statistics:

  • $284 billion in PPP funding is allocated for disbursement to a broader range of nonprofits.
  • $300 per week in additional unemployment benefits is paid through March 14.
  • $600 per person in stimulus checks are issued, with reductions in size and elimination for higher income earners.
  • December 31, 2025, is the deadline for student loan repayment benefits to remain excludable from income.
  • 11 additional weeks of PUA benefits are extended for part-time and gig workers.
  • $25 billion in rental assistance is provided through the moratorium on evictions extension.

Sources:

  • "Bipartisan Bill Extends Pandemic Relief Benefits with Modifications and Expansions" by McClane, December 2020.
  • Mondaq Ltd, 2020, URL: http://www.mondaq.com