New Relief Package Will Bring Expanded Employee Retention Credit, Stimulus Payments and More
December 22, 2020
Congress has finally settled on a new COVID-19 stimulus legislation – The Emergency Coronavirus Relief Act of 2020, which expands the employee retention credit, extends various expiring tax credits, distributes stimulus payments and allows the deductibility of Paycheck Protection Program (PPP)-funded expenses, even if forgiven.
The $900 billion bill, the second-largest next to the Coronavirus Aid, Relief, and Economic Security (CARES) Act in U.S. history, would initiate the following relief measures, among others:
- Direct stimulus payments of $600 to most Americans.
- Enhance unemployment benefits by $300 per week through March.
- Direct the Internal Revenue Service (IRS) to allow the deductibility of expenses related to PPP loan forgiveness.
- Provide an additional $284 billion in funds available through the PPP.
- Allow an additional 13 weeks of unemployment benefits for those that have exhausted their regular state benefits.
- Extension of the employee retention credit, with an increase to 70% of qualifying wages and $10,000 per quarter limit on creditable wages.
- Make the earned income tax break and child tax credit available to people who have lost wages during the pandemic.
It is anticipated that President Trump will sign the bill into law before the new year. Stay tuned – DM Payroll Solutions will keep you updated as the bill progresses through the legislative-making process.