COVID Relief Package

by: Income Tax Consultants LLC
(718)461-2871

The next round of stimulus checks is on the way.
What you need to know?

President Donald Trump on Sunday night signed a $900 billion Covid relief package into law, days after he suggested he would block the bill if the stimulus checks weren't raised to $2,000, from $600. But that never happened: House Republicans quickly shot down Democrats' attempts at passing $2,000 payments.

Here is the breakdown of everything inside The $900BN Stimulus Bill:



Direct Payments:
The legislation would authorize a second round of economic-impact payments, following the checks Americans received in the spring and summer, at a cost of $166 billion. Households would receive $600 for each adult and $600 for each dependent, instead of $1,200 and $500, respectively, in the first round. Mixed-status households, where some people are ineligible noncitizens, would get payments based on the number of eligible people in the households, as opposed to being shut out as they were in the first round. The payments would be based on income from 2019 and begin phasing out for individuals with adjusted gross incomes over $75,000 and married couples over $150,000. Treasury Secretary Steven Mnuchin said Monday that the first electronic payments could reach bank accounts by the beginning of next week. Households whose incomes were too high to qualify or who added dependents in 2020 might not qualify for full payments immediately. But they can request additional money as part of the 2020 tax returns they will file in early 2021.

Jobless Aid:
Workers would be eligible for a $300-a-week federal unemployment subsidy. As with the prior aid package enacted in March, gig workers and others who don’t ordinarily qualify for benefits would be eligible for the jobless aid. The money is available through March 14. It’s not retroactive. The legislation would also extend to 50 weeks the amount of time for which workers may claim benefits through both state and federal programs. Most states typically provide 26 weeks of jobless benefits. The measure also provides an additional $100-a-week subsidy for workers who have both wage and self-employment income but whose basic unemployment benefits don’t take into account their self-employment income. The cost of the enhanced unemployment benefits are projected at $120 billion.

Rental Assistance:
The bill provides $25 billion of assistance to tenants in arrears on their rent. It also extends until the end of January 2021 a federal eviction prohibition, which the incoming Biden administration may extend again. The Treasury Department would be responsible for dispersing the rental assistance to states via a formula based on population. Landlords and building owners can apply on behalf of tenants meeting the eligibility requirements, generally those who make less than 80% of median income in their area, have at least one person in their households who has lost a job and can demonstrate they are at risk of losing their home.

Rail and transit:
The bill would provide $1 billion in relief funds to Amtrak, aimed at helping the national passenger railroad avoid further layoffs and furloughs of its workers. Amtrak receives a regular operating subsidy of around $2 billion a year from the federal government, but its ticket revenue was devastated by the pandemic and lockdown orders. Ridership on some routes fell by more than 90% this year. The company says it will need a total of $4.9 billion in relief aid to get through the remainder of the year without deeper worker and service cuts. The bill also sets aside $14 billion for transit systems, many of which are considering major cuts in service and layoffs. In New York City alone, elected officials say they need an immediate $4.5 billion infusion to stave off severe reductions in subway and bus service. The bill also sets aside $2 billion for the bus industry and $10 billion for state highways. 。

Taxes:
Aside from the PPP break, the bill would extend a tax credit for struggling employers who keep workers on the payroll, and it would let recipients of certain tax credits qualify based on their 2019 incomes; in some cases, lower 2020 incomes could reduce their eligibility. The bill would also temporarily extend tax breaks for renewable energy, including incentives for wind energy and carbon capture. It also includes deductions for business meals, a provision that President Trump backed but that faced criticism from Democrats as a subsidy for three-martini lunches and indoor dining during a pandemic. Lower excise taxes on beer, wine and spirits that were set to expire Dec. 31 will be permanently extended, and tax incentives for investing in low-income areas and hiring workers from disadvantaged groups would be extended for five years.