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A part of the Washington Policy series
Congress passed a scaled-down $900 billion COVID-19 stimulus bill after weeks of negotiations. The relief provisions are attached to a $1.4 trillion spending bill, an “omnibus”, that keeps the federal government running into 2021. Lawmakers dropped the two most controversial provisions—liability relief for COVID-19 related lawsuits and state and local government aid, which cleared the path to passage. However, states and cities are granted another year to spend CARES Act funds.
The legislation takes effect immediately. The IRS program will deliver direct payments to families and access to the paycheck protection program (PPP) can be restarted quickly. Treasury Secretary Mnuchin says the direct payments will start within days through an electronic deposit.
Key provisions for businesses and individuals
- Direct cash payment of $600 per person including dependents. Eligibility is tied to individuals with income under $99,000 and $150,000 for couples.
- Supplemental federal unemployment benefits up to $300 per week through March 14.
- Extension of the employer tax credits for employee retention and paid sick leave.
- Aid to hospitals, K-12, and higher education.
- $69 billion for vaccine purchase, distribution, testing, and tracing.
- One month extension of the eviction moratorium through January 2021.
- $25 billion for a new federal renter assistance program administered by states and cities.
- Infusion of $325 billion to the PPP and the Small Business Association’s (SBA) Economic Injury Disaster Loan program. Eligibility for PPP loans is expanded to small 501(c)(6) non-profits, news outlets, and independent restaurants. The program also comes with new limits. To qualify for a new PPP loan, the borrower must demonstrate a reduction in gross receipts of at least 25% in 2020 compared to the same quarter in 2019. Furthermore, the borrower must have less than 300 employees, or meet an alternative size standard. The bill also expands the list of expenses that can be used to demonstrate loan forgiveness.
- Grants to independent movie theaters and cultural institutions like museums.
Congress extended a handful of industry-specific tax provisions, or tax extenders, including tax credits for investing in low-income areas, renewable energy production, and small beer, wine, and liquor producers, and the bill reinstates the business meals deduction for two years.
Congress also included a provision protecting insured patients from surprise medical bills from unexpected out-of-network and emergency care.
If you have any questions or want to discuss how this may impact you, please do not hesitate to contact your SVB Private representative.