Congress has been furiously debating the provisions of a relief package: what to provide, to whom and how much. Although the lawyers are still getting the details down on paper, the main provisions are clear. We’ll be revisiting this topic in the coming days as the details become clearer. Meanwhile, here are the key takeaways:
- A $600 check per taxpayer ($1,200 for married filing jointly). The phase-out begins for those earning $75,000 annually ($112,500 for heads of household and $150,000 for married filing jointly) and disappears at $99,000.
- Additional unemployment benefits of $300 a week, lasting through mid-March.
- $284 billion for businesses and revival of the Paycheck Protection Program, which ended some months ago.
- Businesses that received PPP loans and had them forgiven faced tax confusion. The new bill will make it clear such businesses will be allowed to deduct the costs covered by those loans.
- Breaks for renters and homeowners: $25 billion in rental relief and an extension of the eviction moratorium through Jan. 31, 2021.
- A ban on surprise medical bills, which sometimes occur when a patient unexpectedly gets care outside of a network. Going forward, insurance companies will have to work these out with providers.
One of the smallest provisions is also one of the most divisive: the return of the 100% deduction of the so-called three-martini lunch — that is, an increased tax break for business lunches, which are currently at 50%. This kicks in for the 2021 tax year and is also available in 2022.
Several heavily debated items are currently off the table, although they may appear in bills in the near future. Their elimination was part of a series of compromises:
- No aid for state and local governments, which Democrats had pushed for.
- No liability protections for businesses, which Republicans had wanted.
- No checks for adult dependents.
- No hazard pay for essential workers.
The bill is still being finalized — it will likely be tweaked before final votes and the president’s signature, although Congress has indicated this is a priority. So nothing should be considered final, including the timing of checks, although Congress has indicated these will go out very quickly after signing.
We’ll have more details as they become available.
As we have been doing with all coronavirus legislation and IRS and SBA guidance during these past several months, we will be sure to update you with any additional insight as soon as possible. Continue to check back here for the most up to date tax information and changes in response to coronavirus. If you have questions about this or related topics contact an MCB Advisor at 703-218-3600 or click here.
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