THE LANDMARK STIMULUS BILL: HELPING YOU NAVIGATE THE COMPLEXITIES

Our team at Tripp Scott stands ready to help navigate the provisions of this far-reaching, nearly 900-page bill and determine how you and/or your organization may be affected or benefit.

Headline Elements – and the “News to Know” Within

Those headline elements, along with some critical “news to know” about each, include:

$350 billion[1] in loans, grants, and payments for small businesses (generally, those with 500 employees or fewer).

• As described by House Ways and Means minority staff, a "Paycheck Protection Program" would provide eight weeks of cash-flow assistance through 100 percent federally guaranteed loans to small employers who maintain their payroll – with the portion of loans used for covered payroll costs, interest on mortgage obligations, rent, and utilities to be forgiven. The program will be retroactive to February 15 to encourage employers to bring back workers.
• In addition, some employers (large as well as small) that face closure orders or suffer economic hardship due to the coronavirus crisis and continue to pay furloughed employees may be eligible for a 50% credit on up to $10,000 of wages paid.
• The Small Business Administration will also be required to pay all principal, interest and fees on all existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs for six months, with regulations implementing the provision forthcoming in 15 days.
• Federal agencies would be required to extend contract performance periods and promptly play small business contractors impacted by the virus. 

Direct payments of $1,200 to most individuals with adjusted gross incomes) $75,000 and $2,400 for couples making up to $150,000, with an additional $500 for qualified dependent children.

• Payments would begin phasing out at a rate of $5 per $100 above the limit for individuals with incomes above $75,000, couples above $150,000, and head of households with one child above $146,500 –– with a complete cutoff for individuals making more than $99,000 and $198,000 for joint filers with no dependents.
• Income eligibility would be based on tax returns for 2018 or 2019, if completed. Amounts will be direct-deposited if the IRS has that information. Individuals who did earn below the income threshold in prior years but do in 2020 will receive credit for reduced amounts when they file next year. The payments will not be treated as taxable income.
• U.S. residents must have a work-eligible social security number and must not be claimed as a dependent by another taxpayer. Payments will be available to Social Security and Railroad Retirement beneficiaries, beneficiaries of income benefit programs such as supplemental security income, and those who have no income.

Expanded unemployment benefits for up to four months, with maximum per-state benefits boosted by $600 per week.

• For some workers, that may mean benefits greater than their usual wages. Controversy arose over these provisions when it became clear that many workers would receive more in benefits than if they continued to work.
• Eligibility is also extended for the first time to independent contractors and the self-employed, including so-called “gig workers,” who experience reduced hours.
• The provisions expire at the end of the year.

$500 billion in loans for larger companies (500+ employees) in distressed industries, as well as state and local governments.

• $425 billion of this amount would back Federal Reserve loans, loan guarantees, and investments.
• The provisions also include $50 billion in loans for passenger airlines, $8 billion for cargo airlines, and $17 billion for businesses critical to “maintaining national security” (thought to be aimed at large defense contractors such as Boeing and their suppliers).
• An oversight board and inspector general will be created to oversee loans to large companies, and there are limitations on increases in compensation for employees earning more than $425,000. Stock buybacks are prohibited during the duration of the loan, and borrowers must maintain existing payroll as of March 13. 

$150 billion in assistance for state and local governments. These provisions will include:

• A 6.2% increase in matching federal funds for Medicaid.
• A $30.750 billion Education Stabilization Fund to help states, school districts and higher education deal with costs from the coronavirus and facilitate online learning.
• A $45 billion Disaster Relief Fund to support overall response efforts.
• $1.4 billion supporting National Guard deployments.
• $25 billion for transit systems.

According to Federal Funds Information for States, $8.3 billion of this assistance would flow to Florida state and local agencies. 

$140 billion in support for hospitals and health-care providers. This funding will include:

• $100 billion in grants to hospitals, public entities, not-for-profit entities, and Medicare and Medicaid enrolled suppliers and institutional providers – including increased Medicare payments – to cover unreimbursed health care related expenses or lost revenues attributable to coronavirus response. Within this provision, per RevCycle Intelligence:

• 20% increases in Medicare reimbursement rates for COVID-19 hospitalizations during the emergency period
• Suspension of the 2 percent Medicare sequestration through Dec. 31, 2020
• Waiving face-to-face requirements for telehealth services during the emergency period
• Expanding the Medicare Hospital Accelerated Payment Program
• Requiring payers to cover COVID-19 tests performed by hospitals and laboratories
• Delaying Medicaid Disproportionate Share Hospital (DSH) payment reductions.

• $16 billion to build a stockpile of medical equipment.
• $4.3 billion, thorough the Centers for Disease Control and Prevention, to support federal, state and local public health agencies.
• $11 billion to support research and development of vaccines, therapeutics, and diagnostics to prevent or treat the effects of coronavirus
• $185 million through the Health Resources and Services Administration to support rural critical access hospitals, rural tribal health and telehealth programs
• $200 million through the Centers for Medicare & Medicaid Services for priorities including support of efforts to help nursing homes with infection control.

Important Additional Provisions Include Payroll Tax, Retail Cost Recovery Fix, Retirement Fund Relief and Mortgage Forbearance

Beyond these “headline” pieces is a wide range of other provisions that may affect many clients, including: 

• The opportunity for employers to delay payment of 2020 payroll taxes until 2021 and 2022.
   
• The ability for businesses to carry back losses from 2018, 2019, and 2020 to the previous 5 years and apply for immediate refunds.
   
• The immediate fix of a tax “glitch” for retailers relating to investments in Qualified Improvement Properties that will allow for immediate refunds from 2018 and 2019 overpayments.
   
• Suspension through 2020 of mandatory minimum withdrawals from retirement accounts for those over 70 or 72, as well as penalties for emergency withdrawals.
   
• The opportunity for homeowners with federally backed mortgage loans to request loan forbearance for up to 360 days – 90 days for holders of federally backed multifamily mortgages – and the halting of foreclosures on properties with federally backed loans.
   
• The opportunity to delay student loan payments until September 30 without penalty.
   

We recognize that many of our clients, along with other businesses and families, are experiencing unprecedented pressures during this time, and look forward to assisting you in any way possible to benefit from, or address concerns arising from, this landmark legislation.

[1] Budgeted dollar amounts are based on preliminary reports and continue to vary.