On Sunday evening, President Trump signed the roughly $900 billion coronavirus relief package that had been passed by Congress almost a week ago. With his signature, the Congress bill is officially a law. Here are the most important takeaways from this Coronavirus Relief Package:
- PPP, Phase 2. The new act reopened the popular Paycheck Protection Program (PPP) by allocating an additional $285 billion for the program. Small businesses that obtained an initial PPP loan can qualify for a second round of loans. More flexible rules have been added to provide for forgiveness of the loans, including clear guidelines that forgiveness of a PPP loan is not taxable. However, eligibility for a second PPP loan is stricter than before. A borrower will have to have fewer than 300 employees, and be able to establish, in general, that they experienced a 25% drop in gross receipts during the first, second, or third quarter in 2020 relative to that same quarter in 2019. The new act caps PPP loans at $2 million. The act also sets aside $12 billion specifically for minority-owned businesses.
- Unemployment Benefits. The new relief act provides an additional $300 per week for all workers receiving unemployment benefits, through March 14, 2021 (and possibly longer). The act also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage for independent contractors, self-employed individuals, and gig workers. The Pandemic Emergency Unemployment Compensation (PEUC) program was also extended to provide additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits. In addition, the new act increases the maximum number of weeks an individual may claim regular state unemployment benefits plus the PEUC program, or through the PUA program, to 50 weeks.
- State and local funding. The final bill has not provided any new state or local aid. This will increase the pressure on Cuomo to reduce spending and cut the multi-billion dollar budget deficit in the upcoming New York State budget season. Providers should brace themselves for Medicaid cuts.
- Liability Protection. The final package does not contain liability protections for businesses related to the coronavirus. As most providers have been concerned about, patients or families of deceased patients are free to sue the home care agencies for liability associated with treating the patient or “exposing” the patient to COVID. Business groups were seeking federal protection from such claims, which would have prohibited families and patients suing agencies for ordinary negligence associated with treating or providing care to a patient during the pandemic. Without this relief from Congress, providers continue to be exposed to a potential claim.
- Second Stimulus Payment. A second stimulus payment will be available, the details of which are as follows: (a) a onetime stimulus payment of $600 for each individual; (b) a onetime stimulus payment of $1,200 for married or joint filers; (c) a onetime stimulus payment of $600 for any dependents age 16 and under. To qualify, the taxpayer must have earned less than $75,000 (for individuals) or $150,000 (for married/joint filers) in 2019. The stimulus payment is reduced by $5 for every $100 of adjusted gross income for taxpayers earning more than the above amounts. As a result, a single tax filer would see no stimulus payment if their adjusted gross income is $87,000 or higher. For a married couple with no children, their payment would phase out completely with adjusted gross income of $174,000.
- Economic Disaster Injury Loan Program. The act added $20 billion for certain grants pursuant to the SBA’s Economic Disaster Injury Loan (EIDL) program. Eligible businesses, independent contractors, gig workers, and self-employed individuals are eligible for up to $10,000 in grants (not required to be repaid) if (a) they are located in a low-income community; (b) they suffered an economic loss of greater than 30% during an 8-week period between March 2, 2020, and December 17, 2021, relative to a comparable 8-week period immediately preceding March 2, 2020, or during 2019; (c) they employ not more than 300 people; (d) they are a qualifying business, such as a small business, private non-profit, sole proprietorship, or independent contractor; and (e) they were in operation by January 31, 2020.