Yesterday evening, President Trump signed a pandemic relief and government-funding measure totaling approximately $900 billion to assist in delivering emergency aid into 2021.
What is included the legislation?
Paycheck Protection Program (PPP)
Funding for the PPP program, which was first appropriated under the CARES Act, will be resumed and allocated in the amount of almost $300 billion. Businesses who have taken advantage of the program previously will be eligible for second round loans. For months, the Chamber has advocated for deductibility of costs covered by PPP loans. Under the legislation, Congress clarified that PPP recipients might take advantage of the deduction if they experienced a revenue loss in 2020 compared to previous years.
Inclusion of 501(c)(6) Organizations
501(c)(6) organizations will be eligible for the next round of PPP loans. In Tennessee, these include membership-based associations and nonprofits such as local chambers of commerce and trade associations. The legislation applies to 501(c)(6) organizations with 300 or fewer employees that do not spend more than 15% on lobbying.
*We are working with the U.S. Chamber to schedule a virtual meeting about 501(c)(6) inclusion and answer questions. Tentative date - January 7, 2021
Testing and Vaccines
Nearly $50 million will be appropriated for testing and vaccination programs. $20 billion will be directed to providing increased testing and $28 billion to procuring and distributing vaccinations across the country.
2020 State CARES Act Spending Extension
Following passage of the CARES Act, Tennessee received $2.36 billion to spend within the state, specifically on pandemic relief. Funding has been directed at programs like SERG and the Tennessee Small Business Relief Fund. They have also been used to target relief for Tennessee nonprofits. Perhaps most importantly to the Tennessee business community, the Lee Administration has directed funding to keep the state’s unemployment trust fund balance above the tax triggering threshold which would impose increased taxes on Tennessee businesses.
The CARES Act specifically stipulates that state relief dollars should be spent by December 31, 2020. Under the legislation passed on Monday, Tennessee will have the option to spend the balance of unspent CARES Act appropriations through December 31, 2021.
Enhanced Unemployment Benefits
Sides agreed on a $300 per week enhanced federal unemployment benefit. This means qualifying Tennessee recipients could be eligible for up to $575 per week after Tennessee’s unemployment benefit is applied. It is believed allocations for this program could extend enhanced benefits through mid-March and will become available as early as next week. The agreement is a decrease from the expired $600 federal benefit offered under the CARES Act.
Individual Stimulus
The legislation lays out appropriations and a framework to send $600 to every adult and every child. This relief check will be half of the $1,200 which was provided to Americans under the CARES Act, but still falls short of what some, including President Trump would like. The $600 direct payment will only be provided to individuals with an annual income under $75,000. Direct payment amounts will be tiered down for those earning more and are completely eliminated for anyone earning $100,000 or greater.
Overall, the recovery package is attached to $1.4 trillion congressional omnibus funding legislation that will keep the government open and operating until October. After appropriated, the United States government will have spent more than $4 trillion in response to COVID-19 pandemic relief. It is expected President Trump will sign the full package into law this evening.
