By now, y’all know that the Federal Government has an approved budget (through September 2021; the end of the Fiscal Year)- and the CARES act provisions have been extended/modified.  This involved a 5593 page bill (and the GOP complained that Obamacare was long!), the majority of which was the budget ($1.4 trillion of the $2.3 trillion package) which also took a significant portion of the verbiage (1815 pages; actually that’s less than 1/3 the total document length).

Unemployment Provisions

Once we wade into the bill beyond the budget (say around page 2000), we find the Unemployment Provisions.  Right now, some 20 million Americans (that’s 10% of everyone over age 18- up to those at age 100 or so!) are receiving unemployment insurance benefits.

The new law provides benefits that are far less valuable than those presented in the original CARES Act.  The PUA (Pandemic Unemployment Assistance) extends the benefit period through 5 April 2021.  However, that also implies that the maximum number of weeks of benefits have not been exceeded.  (That length was 39 weeks; it is now 50.)  So, why is that less valuable?  Because said benefits are now payable up to $ 300 per week, not the previous maximum of $ 600.  This $ 300 benefit also expires on the 14^th of March 2021.

The Pandemic Emergency Unemployment Compensation (PEUC) is also extended.  These are federal benefits that apply when an individual has expended the benefits his/her state may provide.  Should an individual still be receiving PEUA on 14 March 2021,  said benefit is extended through 5 April 2021.  Again, there is a maximum number of weeks allowed one can benefit under this program.   (Previously this was 13 weeks; it’s now 24.)

Return to Work Provisions

It was claimed by many an elected official that the unemployment provisions were too bountiful; as such, folks refused to return to work.  (Of course that refusal- if, indeed it obtained, had NOTHING to do with the conditions of work, where exposure to COVID-19 would have left the employee at grave risk.)  As such, the passed bill requires all states to develop and enforce a suitable method for employers to notify the state when an individual refuses to return to work or accept the offer of employment without a good cause to so refuse. This process can be via phone communication, eMail, or an online portal.  The provisions also demand “plain language” be employed covering return to work laws, what are the rights of an individual to refuse work or a return to work, and how to contest a claim denial.  (The terms of ‘suitable work’ must also be defined by the state.)

Page 1966 ff

This is where the second stimulus payment is defined.  Despite the haranguing by TheDonald and the intent of the Democratic-led House, Mitch McConnell refused to up the payment from $ 600 to $ 2000.  So, now the payment will be $ 600 for each covered individual (taxpayer, spouse, and children under the age of 17) until the $ 150,000 married taxable income threshold is met ($ 75,000 for individuals).  These payments may already be in your bank account by the time this post is public.  (I have been holding off the post until the rigamarole between McConnell, Pelosi, and TheDonald had ironed itself out.)

Payroll Tax Provisions

Employees
I had already reported about TheDonald’s executive order of 8 August 2020.  This order- which seems to have been followed primarily by the US Government for its lesser paid employees (those earning $ 137K or less; the amount where Social Security taxes are no longer taken from  paychecks)- allowed for the deferral of EMPLOYEE Social Security and Medicare (payroll taxes) from 1 September 2020 through 31 December 2020.  These ‘loans’ were to have been repaid by 1 May 2021 (or would be subject to interest and penalties); the act extends that repayment term to 31 December 2021.

Employers

The Employee Retention Tax Credit (ERTC, per the original CARES Act) applied to wages paid between 12 March 2020 and 1 January 2021.  This period is now extended to 1 July 2021.  And the credit- which had been 50% of the qualified wages (for any quarter from 20 March 2020 through December 2020) is now 70% (for the period 1 January 2021 through 30 June 2021- but still compared to 2019 levels)- also had a $ 10K employee limit which is now $ 10K per employee per quarter.  As long as the employer has lost 20% of it gross revenue (receipts) during any such quarter, this tax credit applies.  Note that employing this retention tax credit means that those wages cannot be used for forgiveness of the Payroll Protection Program (PPP).

(In other words, using the ERTC means the payroll for that employee cannot be used for forgiveness of the PPP.  Let me further explain that since the interest rate for PPP loans is 1%, the ERTC should be considered as a potentially better use by employers- even if that means the PPP loan has to be repaid.)

We’ll continue this tomorrow.

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