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In March 2020, the Senate passed the Coronavirus Economic Aid, Relief, and Security Act or the CARES Act. It was larger than the original Senate proposal, but smaller than the subsequent House proposal. Finally, the two were reconciled and the CARES Law became law.
In May 2020, the Chamber presented and approved a new COVID-19 financial aid proposal. The bill, known as the Omnibus Health Solutions and Economic Recovery Emergency Solutions Act, or the HEROES Act, was no assumed by the Senate. At the time, Senate Majority Leader Mitch McConnell (R-KY) suggested that the time was not right for another bill. But with only a few days for federal unemployment benefits to run out, it appears to have changed.
You may be looking for the “HEALS Act” (Health, Financial Assistance, Liability Protection and Schools Act) that is being drafted under the supervision of Senator McConnell. So far, there is no single bill, but rather a series of proposals. Several committee chairs wrote their proposals and presented them separately on the Senate floor.
This article focuses on the United States Worker, Family, and Employer Assistance Act, introduced by Senator Chuck Grassley (R-IA), which focuses on assistance for workers, families, and employers. It’s a much smaller proposal than the entire CARES Act (and the HEROES Act), which weighs only 168 pages, but remember, it’s only part of the overall package. A companion proposal, led by Senator Marco Rubio (R-FL) and Senator Susan Collins (R-ME), addresses the Paycheck Protection Program (PPP) and business tax incentives (I’ll have more on that by separated).
Here’s what Senator Grassley’s proposal offers:
Unemployed benefits. The federal unemployment supplement of $ 600 per week is scheduled to end on July 31, 2020, under the CARES Act. The Chamber’s HEROES Act would extend it until January 31, 2021 and expand other unemployment-related benefits. The Senate proposal would continue payments until October 5, 2020, but at a reduced rate of $ 200 / week. However, starting in October, according to the Senate bill, the payments would increase so that, when combined with the state unemployment payment, they would represent 70% of lost wages. If an individual state cannot bring the total to 70%, the state may suggest an alternative and obtain an exemption from the Secretary of Labor. Also, beginning in October, the additional payment would be considered income to determine eligibility for other benefits.
State financing. The proposal would provide funds to reimburse states for 80% of their increased cash assistance costs and other short-term aid through the Temporary Assistance for Needy Families (TANF) program, up to a limit of $ 2 billion. TANF provides families with financial assistance and related support services. State-administered programs may include childcare assistance, job readiness, and job assistance.
Stimulus checks. Pursuant to the CARES Act, US citizens and residents with adjusted gross income of up to $ 75,000 or $ 150,000 for married couples (subject to gradual elimination), who are not dependent on another taxpayer and have a Social Security number (SSN) eligible to work. eligible for stimulus checks worth $ 1,200 per adult and $ 500 per dependent. As before, there is no “fund”, so people with no income are eligible. And as before, but by breaking with the HEROES Act, anyone with an ITIN is not eligible; anyone with a married SSN filing a joint return with a person who has an ITIN is not eligible. The Senate proposal largely reflects the CARES Act with a few exceptions:
- Under the CARES Act, for the purposes of obtaining $ 500 per child, the law used the same definition for a child that it would use for the child tax credit. The point of conflict for most parents for this purpose was age: the child must be under 17 at the end of the fiscal year. That meant that taxpayers were not entitled to receive the additional payment of $ 500 for a child over 16, even if they lived with you, ate their food, spent their money. and I slept in your house A change was included in the House HEROES Law and the Senate proposal to allow taxpayers with dependents of any age to receive checks.
- As with the HEROES Act, the Senate proposal would make clear that payments should be automatic for those who receive Withdrawal from Social Security or disability benefits (SSDI), Supplemental Security Income (SSI), RRB or VA benefits.
- The CARES Act stipulated that checks were generally not subject to compensation, except for past due child support payments. As in the HEROES Act, The Senate proposal would clarify that checks are protected against liens or bank collections by private creditors or debt collectors. This protection would also apply retroactively to the CARES Act controls (according to this Senate bill) although it is unclear how the retroactive provisions would work; As before, I suppose it will only apply to CARES stimulus checks that have not yet been paid, as well as new checks.
- And even though Congress did not include any language in the CARES that prohibits the payment of checks to deceased and prisoners, and the Treasury decided to withdraw those payments anyway, this time, the Senate proposal did include such language. Under the Senate proposal, any deceased who died before January 1, 2020, anyone in jail at the time the check is processed by the Treasury, or anyone in prison throughout 2020, cannot receive a check. This language is also retroactive to the controls of the CARES Law.
- One of the points of confusion under the CARES Act was whether representative beneficiaries of Social Security (SSA), Veterans Affairs (VA), and the Railroad Retirement Board (RRB) benefits could accept the payment. As in the HEROES Act, The Senate proposal clarifies that a representative payee can accept a check as long as the payee representative has used the payment for the payee.
Payroll tax credits and deferrals. Employers would be allowed a payroll tax credit equal to the applicable percentage of qualified pandemic related employee benefit expense. The amount allowed as a credit under the Employee Retention Credit (ERC) is 50% of wages. The Senate proposal would increase that to 65% (compared to 80% in the HEROES Act), and the $ 10,000 limit for all quarters would increase to $ 10,000 per quarter, with a limit of $ 30,000 for the year (the limit was $ 45,000 in the Act HEROES); gradual incorporation would also apply to credit reduction. A similar credit would apply to freelancers, but at the other extreme, the credit was calculated differently for employers with more than 100 full-time employees: The Senate proposal would increase that limit to 500. Under the HEROES Act and the Senate proposal, a credit for fixed expenses would be allowed. Payroll tax deferrals would be allowed for recipients of Paycheck Protection Program (PPP) loans as long as there is no double dip.
Adding a Job Opportunity Tax Credit (WOTC). The WOTC credit is available to employers who hire people from certain target groups who have consistently faced significant job barriers. Those target groups are currently TANF recipients, qualified veterans, qualified ex-offenders, designated community residents; vocational rehabilitation referrals; SNAP recipients, SSI beneficiaries, long-term family assistance beneficiaries and qualified long-term unemployment beneficiaries. The Senate proposal would add a new group: 2020 qualified unemployment beneficiaries COVID-19. A COVID-19 unemployment recipient qualified for 2020 is defined as someone who had been receiving unemployment compensation prior to the hire date and begins work after the date the bill becomes law (if it occurs) , but before January 1, 2021. The Senate proposal also increases the amount of credit applicable to the new target group to 50% of the first $ 10,000 of qualified wages in the first year (for most target groups, wages maximums that are eligible for WOTC credit are $ 6,000, and the credit is 40%).
Safe and healthy tax credit in the workplace. The Senate proposal would introduce a new reimbursable payroll tax credit equal to 50% of an employer’s “qualified employee protection expenses” for the period beginning March 12, 2020 and running through January 1, 2021. Those expenses would include COVID-19 testing, Personal Protective Equipment (PPE), cleaning supplies, qualified reconfiguration expenses in the workplace (such as the plexiglass protectors that are appearing) and “qualified technology expenses in the workplace (as a contactless point of sale (POS) (systems). Expenses would be limited each quarter based on the average number of employees: $ 1,000 for each of the first 500 employees, plus $ 750 for each of the next 500 and 1,000 employees, and $ 500 for each employee over 1,000. Employed persons would also qualify.
Assistance for independent contractors. Generally, the assistance provided to workers can be used as evidence of control (and therefore runs the risk of turning an independent contractor into an employee) The Senate proposal would allow businesses to offer tax-free assistance, including financial aid and healthcare expenses, to independent contractors without jeopardizing that state.
Temporary transfer for flexible spending agreements (FSA). Relief reflex found in the HEROES Act, The Senate proposal would allow taxpayers to transfer FSA amounts through 2021. This would apply to FSAs for health care and dependent care.
State tax security. One of the concerns raised during the pandemic was how to assess state and local taxes for workers who work remotely. The Senate bill would allow employees who perform job duties in multiple states to be subject only to income tax in their state of residence and in any jurisdiction where the employee is present and performs job duties for more than 30 days during the calendar year. (90 days for first-line health care and other workers). This provision would apply until 2024. And I’m sorry, Phillies, this will not apply to professional athletes, professional artists, skilled video, television or other commercial video production employees, or certain public figures.
And that is. You can read the text of the Law here (PDF downloads). It is short, right? Well, relatively speaking of a stimulus package … But expect it to “pile up”: Those other proposals will eventually combine.
Keep checking for more details.
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