A long-awaited stimulus package carrying a $1 trillion price tag has been unveiled by the Senate Republicans. The proposed legislation package dubbed the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act would provide stimulus payments to individuals, additional Paycheck Protection Program (PPP) loans, small business tax incentives and credits for domestic production of vital products, among other things.

Doeren Mayhew has highlighted the main provisions of the proposed legislation.

  • Stimulus Payments: Individuals would receive another $1,200 economic stimulus check, while couples would receive $2,400, following the same eligibility formulas as the first round of Coronavirus Aid, Relief, and Economic Security (CARES) Act payments. Stimulus payments would be completely phased out at $99,000 and $198,000, respectively. A $500 payment for each dependent will also be paid out to those that qualify.
  • PPP Funding: An additional round of $100 billion in PPP funding, on top of existing leftover funding, would be available to support second loans for recipients. Recipients would have to meet mandated restrictions – employing 300 or fewer employees and be able to demonstrate their revenue fell by at least 50% in the wake of the pandemic to receive a second loan. Loans would be easier to apply for and be eligible to use on technology improvements, restoring property damaged during civil disturbances in 2020 and supplier costs.
  • Employee Retention Tax Credit: The employee retention tax credit, which currently provides a 50% refundable payroll tax credit on certain wages paid during the crisis, would increase to 65% of qualified wages and increase the per-employee limitation to $10,000 per quarter, up from $10,000 per year in the CARES Act. Gross receipts threshold requirements would be reduced from 50% to 25% compared to the same calendar quarter in the previous year. The credit would also provide more assistance to larger businesses by compensating all wages paid for 500 employees or fewer. Businesses would be able to use both the employee retention tax credit and the PPP loan with limitations to prevent overlapping benefits.
  • Qualified Investment Tax: A qualified investment tax credit would be available for manufacturers producing personal protective equipment in the United States, providing a 30% tax credit against equipment costs associated with this type of manufacturing.
  • Work Opportunity Tax Credit: Temporary expansion of the work opportunity tax credit would be available to employers hiring individuals in qualified groups, including a new designated COVID-19 unemployment recipient group. The maximum credit would be expanded from $2,400 to $5,000.
  • Business Meal Deductions: The HEALS Act would temporarily allow a full deduction for business meals of up to 50% through Dec. 31, 2020.

With Congress set to recess on August 7, legislators have less than two weeks to negotiate the final package. Stay tuned for more information. In the meantime, if you have any questions related to COVID-19 relief measures and how they impact you and your business, contact Doeren Mayhew’s CPAs and advisors.