Congress passed the Consolidated Appropriations Act, 2021 on Dec. 21, 2020. While a large portion of the almost-6000 page bill consisted of appropriations to keep the federal government running, the bill also included the Coronavirus Response and Relief Supplemental Appropriations Act (the CRRSA), which is a follow-up to the Coronavirus Aid, Relief and Economic Security Act (CARES Act) that was enacted in March 2020. After a week of uncertainty, President Trump signed the bill into law on Dec. 27, 2020. Like the CARES Act before it, the CRRSA provides a broad range of economic relief measures for individuals, businesses, and industries affected by the COVID-19 pandemic.
The following is an overview of key provisions of CRRSA. Note that CRRSA is combined with a general appropriations bill; this overview is intended only to address the coronavirus relief portions of the act.
For more details, please contact your Taft attorney, Jeffrey Schloemer, or Neal Roach and continue consulting the Taft COVID-19 Toolkit, which is regularly updated.
Aid to Individuals
- Recovery checks in amounts up to $600 for individuals, $1,200 for married couples, and $600/child age 16 and under. As under the CARES Act, the payments phase out after an income threshold, based on 2019 income, of $75,000 for single filers and $150,000 for joint filers, with a complete phase-out for single filers with incomes exceeding $99,000 and $198,000 for joint filers.
- Unemployment compensation benefits in an amount equal to $300 per week, in addition to any existing state benefits, for up to 11 weeks. The act also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage for independent contractors and self-employed individuals. The Pandemic Emergency Unemployment Compensation (PEUC) program, which provides unemployment benefits to individuals who exhaust their regular state benefits, was also extended to provide additional weeks of federally funded unemployment benefits to individuals who exhaust their regular state benefits. In addition, the CRRSA increases the maximum number of weeks an individual may claim regular state unemployment benefits plus the PEUC program, or through the PUA program, to 50 weeks.
- $25 billion in rental relief, to be used for future rent and utility payments and back rent or utility bills owed, as well as an extension of the federal eviction moratorium through Jan. 31, 2021.
Aid to Businesses
- New PPP Loans: The CRRSA revives the Paycheck Protection Program (PPP), which provided forgivable loans to businesses. The act adds almost $300 billion in PPP funding.
- Existing PPP borrowers with less than 300 employees that can show a decline of at least 25% in gross receipts on a quarter over quarter basis may apply for a second loan of up to $2 million.
- The CRRSA also expands the list of eligible expenses for forgiveness to include software, cloud computing expenses, and human resources and accounting costs.
- The Act requires the Small Business Administration (SBA) to create a simplified forgiveness application for loans of $150,000 or less. The simplified application will only require borrowers to state the number of employees retained and the amount of PPP funds spent on payroll.
- Two of the biggest complaints of borrowers in the original PPP program were addressed: First, the CRRSA reverses IRS guidance on the deductibility of business expenses. PPP borrowers can now claim deductions for business expenses even if those expenses were paid using PPP loan proceeds. Second, PPP borrowers who obtained a $10,000 advance under the SBA’s Economic Injury Disaster Loan (EIDL) program are no longer required to deduct that advance from their forgiveness amounts.
- EIDL Grants: The CRRSA added $20 billion for grants under the EIDL program. Eligible businesses, independent contractors, and self-employed individuals are eligible for up to $10,000 in grants (not required to be repaid) if they meet certain economic requirements.
- The CRRSA authorizes $2 billion for the SBA’s 7(a), 504, and microloan programs, while allowing the agency to waive borrower and lender fees. The SBA is permitted to raise the standard guarantee on 7(a) loans to 90% from 75%, retain the size threshold for SBA Express loans at $1 million and authorized to create a 504 Express program to expedite approval of loans under $500,000.
- $15 billion in aid has been allocated for live venues, independent movie theaters, and cultural institutions.
- As noted above, business expenses paid for with forgiven PPP loans are now deductible.
- Extension of the special charitable contribution provisions enacted for 2020 through 2021.
- Extensions, in some cases permanently, of many of the regularly expiring tax breaks that had been scheduled to expire at the end of 2020.
- Enhancements to the Child Tax Credit and the Earned Income Tax Credit for low-income families.
- Restoration of the 100% business meals deduction for two years to help the restaurant industry.
- Allowing COVID-19-related expenses to qualify for the above-the-line educator expense deduction.
- Clarification that certain financial aid received by college students and forgiveness of the EIDL program to small businesses are excluded from income.
- Extension of the credit for paid sick and family leave enacted as part of the CARES Act through March 31, 2021.
- Extension of the CARES Act employee retention credit through June 30, 2021.
- Extension of the time allotted for repayment of employee Social Security taxes deferred under a presidential memorandum through the end of 2021.
- Several federal agencies received additional funding to be used for COVID-19 research, diagnosis, treatment, and vaccination, including $8.75 billion to the Centers for Disease Control, $4.25 billion to the Substance Abuse and Mental Health Services Administration and $1.25 billion to the National Institutes of Health.
- $3 billion was allocated to the Public Health and Social Services Emergency Fund to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.
- The lifting of the Medicare sequester (which would, if in effect, reduce payments to providers by two percent) has been extended to March 31, 2021, thus boosting payments for hospital, physician, nursing home, home health, and other care.
- While not directly related to COVID-19, the act also includes provisions limiting “surprise billing” and providing a mechanism for determining out-of-network provider payments.
- The provision of the CARES Act that allowed federal contractors to keep their employees on payroll even when the federal facility and jobsite were closed to contractor personnel has been extended to Dec. 31, 2021. (Notably, this is an unappropriated provision, so the respective contracting agency is expected find funding from its regular budget to cover costs. Contractors should submit reimbursements requests without delay.)
- Federal contractors should watch for increased COVID-specific contracting in both public health and the Department of Defense:
- The CRRSA provides the Department of Health & Human Services with $20 billion for purchasing vaccines, $3.3 billion to build up the Strategic National Stockpile, and adds $19.7 billion for Biomedical Advanced Research and Development Authority for vaccines and other therapy research. The CRRSA also allocates about $30 billion to be deployed to state and local governments for COVID-19 vaccine distribution, testing, tracing and other mitigation strategies.
- The CRRSA authorizes $174.6 billion to cover Defense Production Act (DPA) purchases, which are rated orders that require private companies to allow the U.S. government to jump the line for supplies. President Trump invoked the DPA in April to limit hoarding of medical supplies, and it has since been used to encourage retooling for personal protective equipment.
Other Relief Grants
- $81 billion was allocated for educational grants, including emergency grants to elementary and secondary schools as well as to institutions of higher education.
- $10 billion was allocated to block grants to support child care.
For further information, please contact any member of Taft’s COVID-19 Task Force.
Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.