After months of negotiations and compromise, Congress has passed a new round of Coronavirus relief. While this bill will provide much-needed aid to the American people, it is my sincere hope that we are able to provide more assistance in the new year with a new president.
At the beginning of the pandemic, my team and I worked to answer many of your frequently asked questions. I hope that this updated guide will help you and your neighbors understand the contents of Congress’s latest relief package.
Table of Contents
Omnibus and Coronavirus Relief Package Overview
Provides for immediate, direct cash payments to lower-and middle-income Americans of $600 for each adult and $600 for each dependent under age 17, beginning to phase out at an annual income of $75,000 for an individual and $150,000 for a household.
Eligibility requirements mirror those under the CARES Act (e.g., you must have a work-eligible social security number)
Corrects CARES Act language to authorize $600 for each citizen in a “mixed-status” family. Mixed-status families, where a U.S. citizen files his or her taxes jointly with a non-citizen, were ineligible for Economic Impact Payments under the CARES Act. These families can also now claim the original CARES Act Economic Impact Payment on their 2020 return in 2021.
Boosts Federal Pandemic Unemployment Compensation (FPUC) by $300 for 11 weeks.
FPUC is a federally funded weekly plus-up that is available to anyone receiving at least $1 of unemployment insurance
- Reports indicate that claimants can expect benefits by mid-January.
Extends Pandemic Unemployment Assistance extended for 11 weeks.
PUA makes individuals who do not qualify for regular unemployment compensation, like self-employed workers, independent contractors, and gig workers, eligible for assistance.
State labor agencies are waiting for official U.S. Department of Labor (USDOL) guidance on details, however, USDOL has signaled these are expected to be continuous benefits for eligible claimants beginning on the day the CARES Act expired.
Extends Pandemic Emergency Unemployment Compensation for 11 weeks.
PEUC allows states to provide 13 additional weeks of unemployment benefits to individuals who previously received unemployment benefits but exhausted those benefits.
Claimants who are currently receiving Extended Benefits (EB) will stay on that program until it is exhausted before potentially becoming eligible for the additional weeks of PEUC.
Provides an extra $100 (on top of $300) to “mixed earners” who earned income from both W-2 and non-W-2 jobs
Extends the CDC’s eviction moratorium until January 31, 2021
Provides $25 billion in rental relief funding
This money will be used to cover missed rent, utilities, and other costs accrued since the pandemic started
Funds will be funneled through a new program at the Treasury Department and intermediated by state and local agencies
To access the funds, renters will apply and state agencies will send payments directly to landlords
Landlords can also apply directly for assistance but will be required to notify the tenant that they are doing so and obtain the tenant’s consent
To qualify, households must meet these qualifications:
Have a household income of no more than 80% of the area median income (AMI) as defined by the U.S Department of Housing and Urban Development
have one or more members who can demonstrate a risk of homelessness or housing instability; AND
have one or more members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic
Increases SNAP’s monthly benefits for 6-months
Suspends work requirements for SNAP-eligible college students while work-study programs may not be operating during COVID emergency
Provides supplemental $400 million for The Emergency Food Assistance Program (TEFAP), which assists food banks
Provides an additional $13 million for Commodity Supplemental Food Program
Provides an additional $175 million for Meals on Wheels
Paycheck Protection Program
Reopens the Paycheck Protection Program (PPP) with another $284.5 billion in funding.
Note: On January 8, the SBA and Treasury Department announced that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers: "To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11 and Second Draw PPP Loans on Wednesday, January 13. The PPP will open to all participating lenders shortly thereafter."
Second Draw of PPP
The bill allows the hardest hit small businesses to obtain a second PPP loan. To qualify for another forgivable loan, an eligible business must have 300 or fewer employees and demonstrate at least a 25 percent reduction in gross revenues between comparable quarters in 2019 and 2020. Second draw loans are limited to $2 million.
Ensuring Access in All Communities
The bill includes set asides to ensure that PPP money will reach small businesses in all communities. $60 billion will be set aside for first and second draw loans to small businesses with 10 or fewer employees, or loans less than $250,000 to small businesses in low-income areas. $30 billion will also be set aside for small financial institutions like community banks and credit unions, as well as community financial institutions like community development financial institutions.
Expanded PPP Eligibility
Certain 501(6)c non-profits, Destination Marketing Organizations, and housing cooperatives with 300 or fewer employees can receive funding, as can news organizations with 500 or fewer employees
Supports Payroll Expenditures
Borrowers receive full loan forgiveness if they spend at least 60 percent of their PPP second draw loan on payroll costs over any time period between 8 weeks and 24 weeks.
PPP Expansion for Restaurants
Eligible employers can take out loans equal to 3.5 times payroll, instead of the normal 2.5 times
Forgivable expenses now include supplier costs on existing contracts and purchase orders, the costs for perishable goods at any time, costs relating to worker safety, and technology operations expenditures such as software expenses. The bill also streamlines the loan forgiveness process for loans of $150K or less.
Deductibility for Expenses Paid with PPP Loan Proceeds
The bill clarifies that expenses paid with forgiven PPP loans are indeed tax-deductible. In addition, the bill clarifies again that forgiven loans do not count as income.
What support is available for businesses beyond PPP?
Support for Live Venues, Theaters, Museums, and Zoos
The package creates a $15 billion Independent Live Venue Operators Fund to provide grants to eligible live venue operators, theatrical producers, live performing arts organization operators, museum operators, motion picture theatre operators, or talent representatives that have experienced significant revenue losses. It directs the SBA to make grants to eligible venues equal to the lesser of either 45 percent of their operating costs from calendar year 2019 or $10 million. Recipients could use these grants to support payroll costs, rent, utilities, and PPE costs. Venue operators who receive a grant through the Fund cannot receive additional PPP monies.
Targeted Economic Injury Disaster Loan Advance Program
The bill appropriates $20 billion for the EIDL Advance program only for businesses in low-income areas, which are areas with poverty rates greater than 20% and median family incomes are 80% of the average for the state. These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19. The advance does not need to be repaid, and may be used to keep employees on payroll, pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
The relief package builds on the CARES Act's employee retention tax credit (ERTC). The modifications will:
- Increase the credit rate from 50 percent to 70 percent of qualified wages;
- Expand eligibility for the credit by reducing the required year-over-year gross receipts decline from 50 percent to 20 percent and provides a safe harbor allowing employers to use prior quarter gross receipts to determine eligibility;
- Increase the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter;
- Increase the 100-employee delineation for determining the relevant qualified wage base to employers with 500 or fewer employees;
- Allow certain public instrumentalities to claim the credit;
- Remove the 30-day wage limitation, allowing employers to, for example, claim the credit for bonus pay to essential workers;
- Allows businesses with 500 or fewer employees to advance the credit at any point during the quarter based on wages paid in the same quarter in a previous year;
- Provide rules to allow new employers who were not in existence for all or part of 2019 to be able to claim the credit; and
- Retroactive to the passage of the CARES Act, the bill allows employers who receive Paycheck Protection Program (PPP) loans to qualify for the ERTC with respect to wages that are not paid for with forgiven PPP proceeds.
Thank you to the hard-working staff on the House Committee on Ways & Means, who helped assemble answers to the following questions. For the latest information on the distribution of direct payments, please click here.
When and how will the additional economic impact payments (EIPs) be distributed?
The IRS has begun issuing payments to eligible individuals who either filed a federal income tax return for 2019, registered for the first round of payments through the IRS’s non-filer portal, or receive Social Security, Supplemental Security Income (SSI), Railroad Retirement Board (RRB), or Veterans Affairs (VA) benefits. When available, electronic direct deposit will be used in place of mailing a paper check.
Individuals who do not receive an advance payment automatically will be able to claim a credit for their EIP amount on their 2020 federal income tax return.
If my income was lower in 2020 than in 2019, how does that affect my EIP?
The payment amount is determined by your 2020 income. Economic Impact Payments are technically an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return. Accordingly, many individuals and families will receive payment automatically in early 2021 based on their 2019 tax return information. For individuals and families who experienced a drop in income between 2019 and 2020, this amount may be less than what you are entitled to based on your 2020 income. Therefore, taxpayers can claim a credit on their 2020 federal income tax return for the difference between (a) the amount they are entitled to under law and (b) the amount they received as an advanced payment.
How large are the EIPs?
The size of your EIP depends on your adjusted gross income and family size. The maximum payment amount is $600 for each taxpayer ($1,200 for joint filers), and $600 per qualifying child. The payment is reduced by $5 for every $100 of income above the following thresholds: $150,000 for joint filers, $112,500 for a head of household filer, and $75,000 for single filers.
Does the phaseout apply to EIP amounts related to qualifying children?
Yes. The phaseout ($5 for every $100 of income in excess of the relevant thresholds) applies to the entire EIP amount, which includes the portion related to qualifying dependents.
Is there a limit on the number of qualifying children taken into account?
Are EIPs subject to federal income tax?
No. The EIPs are federal income tax refunds and therefore are not subject to federal income tax.
Are non-filers eligible for payments?
Yes. Non-filers who are Social Security, SSI, RRB, and VA beneficiaries will be paid automatically by the IRS. Individuals who used the non-filer portal to receive their first EIP under the CARES Act will also be paid automatically. Individuals who believe they are eligible for an EIP but did not receive one in the first round must file a 2020 tax return to access their EIPs, even if they otherwise would not be required to file a tax return.
How will a person who has recently moved access the EIP?
If a person has provided direct deposit information on a 2019 income tax return that has been processed, the IRS will use that information to issue an electronic payment. Otherwise, generally, a person should look at the IRS's website for guidance on providing direct deposit information or a change of address to the IRS.
Will the payment affect my eligibility for other federal income-targeted programs (i.e. health insurance subsidies)?
What are the identification requirements to receive an EIP?
A taxpayer must provide a Social Security number (SSN) in order to receive an EIP and must provide SSNs for any qualifying children in order to receive payment for those children. For couples filing jointly, at least one spouse must provide a valid SSN to receive their portion of the payment or credit.
Beyond the payment amount, how is this round of payments different from the first one?
Under the CARES Act, if one spouse did not provide a Social Security number (SSN), that family could not receive an EIP. The new legislation modified this requirement so that if only one spouse provides an SSN, that spouse will be entitled to receive their portion of the EIP as well as an amount for any qualifying children with SSNs. This change was also made retroactively to the CARES Act, so these families will be able to also claim a first round EIP on their 2020 tax return for eligible family members. In addition, advance payments made in the second round will not be subject to offset for past-due child support owed and are expressly exempt from garnishment.
I still haven't received my first Economic Impact Payment. What can I do?
Eligible individuals who did not receive an Economic Impact Payment – either the first or the second payment – will be able to claim their payment when they file their 2020 taxes in 2021. Many people, including recent college graduates, may be eligible to do so. People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.
How do I find out if the IRS is sending me a payment?
People can check the status of both their first and second payments by using the Get My Payment tool.
I am an H&R Block customer and haven't received my stimulus payment. Should I be concerned?
H&R Block is working to resolve the issue. If the IRS Get My Payment tool displays an account number a customer doesn’t recognize, that person should contact H&R Block at 1-800-HRBLOCK and 1-866-353-1266 for Emerald Card.
This information was compiled with the assistance of the House Financial Services Committee.
Is there an extension of the eviction moratorium?
Yes. The COVID-19 Stimulus Package extends the CDC’s eviction moratorium until January 31, 2021.
What assistance will the relief package make available to renters?
Eligible renters may receive assistance with rent and utility payments, unpaid rent or utility bills that have accumulated since the beginning of the coronavirus pandemic, and other housing expenses that were incurred due, directly or indirectly, to the pandemic. Eligible renters can also receive access services, such as case management and tenant-landlord mediation, to help them remain stably housed. A household may receive up to 12 months of assistance but may receive an additional three months of assistance only if it is necessary to ensure the household remains stably housed and funds are available.
How can renters (and property owners) apply for, and receive assistance?
Renters will apply for assistance with entities that state and local grantees select to administer the program. Once a renter qualifies for assistance, the administering entity would send the payment directly to the landlord. If a landlord declines to receive the assistance from the administering entity, a renter may instead receive a direct payment from the administering entity to make rental payments to their landlord themselves. Property owners could also assist renters to apply for rental assistance under the program or apply on behalf of the tenant, but will be required to notify the renter that assistance is being provided on their behalf and obtain their consent in the application.
Who would be eligible to receive emergency rental assistance?
Eligible households are defined as renter households who:
have a household income not more than 80 percent of the area median income (AMI);
have one or more household members who can demonstrate a risk of experiencing homelessness or housing instability; and
have one or more household members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic.
Assistance would be prioritized for renter households with incomes that do not exceed 50 percent of AMI as well as renter households who are currently unemployed and have been unemployed for 90 days.
In determining household income, the administering entity must consider the household’s income for 2020 or the household’s monthly income at the time of application for assistance, which must be recertified every three months if the household is receiving ongoing rental assistance.
Phone Number: 800-232-4636
Connecticut Coronavirus News Portal
U.S. Small Business Administration
Internal Revenue Service
U.S. Department of Education
Consumer Financial Protection Bureau
U.S. Department of Health and Human Services
U.S. Food and Drug Administration
U.S. Department of Labor
U.S. Department of State
Centers for Medicare and Medicaid
U.S. Department of Homeland Security
U.S. Department of Veterans Affairs
U.S. Department of Agriculture
U.S. Customs and Immigration Services
Social Security Administration
Connecticut Department of Public Health
Phone Number: 860-509-8000
Phone Number: 203-332-3000
Please don’t hesitate to contact me with your questions. We’re in this together.