December 21, 2020 – UPDATE: Congress overwhelmingly passed the year-end spending and relief bill late Sunday night. Because of the size of the bill, there will be a delay before the President is able to sign. The White House has indicated that President Trump will sign the bill. A seven-day stopgap spending bill was also passed and signed to keep the government open through December 28 in order to provide the President time to sign the larger bill.
After passing another Continuing Resolution on Friday night to extend government funding through the weekend, Congress has reached an agreement on a new COVID-19 relief package to be passed together with an Omnibus government spending bill that will fund the federal government through the end of its fiscal year next September. Late Sunday, Congress passed yet another CR to continue funding through the end of Monday with the intention that the year-end package could be passed before the end of the day.
The final text of the legislation was not made available until 2:00 PM Eastern on Monday.
Among the COVID-19 relief changes in the bill are:
Employee Retention Credit
- Extended through June 30, 2021
- Retroactively allows employers who received PPP to also claim ERC with respect to wages that were not paid for with forgiven PPP loans.
- For 2021 only,
- Makes the credit available to public colleges and universities as well as public entities whose primary function is providing medical or hospital care
- increases the credit from 50% to 70% of qualified wages
- Increases qualified wages from $10,000 total to $10,000 per quarter
- expands eligibility by reducing the reduction in gross receipts test from 50% to 20%
- increases the 100-employee delineation for determining qualified wages to 500 employees
- Additional funds available for PPP loans with priority for businesses that never received the loan
- Opportunity for some businesses to receive a second PPP loan
- Allows the deductibility of expenses paid for with forgivable PPP funds providing a double-benefit
- Extends the Work Opportunity Tax Credit (WOTC) for five years
- Extends the Federal Empowerment Zone Tax Credit (FedEZ) for five years
- Extends the Indian Employment Credit (IEC) for one year
There is also a new retention credit for 2020 qualified disasters patterned after credits which have been made available following previous natural disasters.