Coronavirus Legislation Moves Through The Federal Government
Congress and the White House have implemented numerous legislative measures to address the coronavirus pandemic from a variety of perspectives. The first piece of legislation, the Coronavirus Preparedness and Response Supplemental Appropriations Act, provides $8 billion for health programs, as well as $7 billion in small-business loans. Some of the federal agencies named in this legislation include the Centers for Disease Control and Prevention, National Institutes of Health and the Food and Drug Administration, among others.
A second measure, named the Families First Coronavirus Response Act, provides paid leave, tax credits, expanded unemployment and nutrition assistance, and free coronavirus testing. Some of this legislation’s provisions include a requirement for private sector employers with less than 500 workers to offer emergency paid leave programs to their employees, a requirement for government entities to provide up to 12 weeks of paid family leave and a requirement for employers to provide workers with two weeks’ paid sick time. The legislation allows the Department of Labor to exempt small businesses with less than 50 workers from the paid leave requirements, which would be financed through tax credits for the companies affected by the law. The legislation also provides a similar refundable tax credit for self-employed workers.
Both of these proposals have been passed by Congress and signed by the president.
The third piece of legislation that is currently being considered to provide relief to businesses and individuals affected by the coronavirus pandemic is S. 3548, the CARES Act. The CARES Act would make technical corrections to 2017’s Tax Cuts and Jobs Act and modify elements of that law to help businesses spread their losses out over time. The CARES Act would also broaden one of the Small Business Administration’s lending programs to include public and private entities with 500 or fewer employees that don’t currently qualify for small-business loans. As of March 24, the legislation is still being negotiated by the Senate. Although some of the specific amounts of various proposals within the bill are likely to change before the bill is finalized, there are several core aspects of the legislation that are highly unlikely to be excluded from the final version.
The CARES Act provides recovery checks to most taxpayers, consisting of up to $1,200 for individuals, $2,400 for married couples filing jointly, and $500 for children. The relief assistance disbursements will be means tested, and the eligibility for assistance decreases at incomes above $75,000, with no eligibility for incomes above $99,000. The CARES Act also extends the individual tax-filing deadline from April 15 through July 15. The Treasury Secretary also announced Friday, March 20, that he was using his administrative authority to implement this policy.
The CARES Act provides cashflow assistance through federal loans to employers who maintain their payroll during the emergency. There are options for these loans to be forgiven, but the current version of the legislation does not provide full clarity on what the criteria are for loan forgiveness.
Oher provisions of the CARES Act include expanding the allowable uses for funding issued through small-business loans. With certain loans, many business expenses are not currently eligible to have payments applied to them with funding from small-business loans, for example, paid sick leave and employee salaries. The CARES Act would change that restriction for a variety of uses, including supply chain disruptions, mortgage payments and other debt obligations for small-business owners.
The CARES act also relaxes some obligations for businesses affected by the coronavirus pandemic through deferred payments on estimated taxes, increased deductibility for interest expenses and some payroll taxes.