Summary of Ongoing Congressional Activity Responding to COVID-19
Administration Request to Congress for Supplemental Appropriations
The administration is seeking approximately $46 B in additional funding across Federal agencies to cover increased costs in responding to COVID-19. This includes hundreds of millions of dollars for USDA agencies. In addition, USDA is requesting a restoration of Commodity Credit Corporation (CCC) borrowing authority and an increase in the borrowing limit from $30 B to $50 B. USDA also asked for authority to extend the repayment period for marketing assistance loans. These requests are expected to be taken up in a broader supplemental funding bill, following passage of the Phase 3 stimulus/relief package. Below is summary of the Phase 3 bill introduced by Senate Republicans yesterday.
Senate introduced CARES Act
I. Small Business Interruption Loans
Eligible to businesses with up to 500 employees
Allows not for profit entities to qualify
Loan amount up to $10 M through end of 2020
Expands use of loan funds to include payroll, paid sick or medical leave, salaries, mortgage payments and other debt obligations
Government guarantees the loans at 100% through end of 2020; 75 to 85% after 2020
Loan forgiveness – establishes process for borrowers to have loan forgiven in amount used for payroll and debt obligations for period March 1 to June 30, 2020. Amount forgiven reduced proportionally to the number of employees laid off during the period relative to prior employment level.
II. Relief for Individuals, Families and Businesses
Checks up to $1,200 per person/$2,400 per couple and increased by $500 per child. Phases down at adjusted gross income over $75,000 single/$150,000 joint filing; completely phased out at $99,000 single/$198,000 joint filing adjusted gross income based on 2018 tax return.
Extends tax filing date to July 15; tax payment deadline already extended by IRS
Individuals can postpone estimated tax payments until October 15
Waives 10% penalty for early withdrawal from distributions from retirement accounts
Corporations can postpone estimated tax payments until October 15
Employers and self-employed individuals can defer payment of employer share of Social Security (payroll) tax. Deferred tax must be paid back over the next 2 years with half paid by end of 2021 and half by end of 2022.
Allows net operating losses (NOLs) from 2018, 2019, or 2020 to be carried back 5 years. Temporarily removes the taxable income limitation to allow an NOL to fully offset income.
Allows pass through businesses and sole proprietors to benefit from NOL carryback provision
Temporarily increases from 30% to 50% of taxable income for 2019 and 2020 the amount of interest expense that businesses are allowed to deduct
III. Assistance to Severely Distressed Sectors of the US Economy
$208 B to provide sufficiently collateralized loans and loan guarantees as outlined below:
Up to $50 B for passenger air carriers
Up to $8 B for cargo air carriers
Up to $150 B for other eligible entities
Repeals Federal Excise Tax collected on commercial aviation through end of 2020
IV. Healthcare Response