2020 End-of-Year COVID-19 and Legislative Action

2020 End-of-Year COVID-19 and Legislative Action The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was signed into law on March 27, 2020. This far-reaching legislation was the largest emergency aid package in U.S. history, making a massive financial injection into our economy with provisions aimed at helping American workers, small businesses and industries struggling with the economic disruption. Yet since that time, numerous influential people from politicians to economists have cried out for more government relief and stimulus because of the devastating impact COVID-19 has had on the American economy and its residents. According to the U.S. Bureau of Labor Statistics in their December 4, 2020, report—“The Employment Situation – November 2020”—14.8 million Americans reported that they either lost their jobs or had reduced hours because of the pandemic. Another 3.9 million were prevented from looking for work due to the pandemic. After months of political fighting, primarily along partisan lines, Democrats and Republicans in both houses of Congress were finally able to reach a compromise. On December 21, 2020, Congress passed the Consolidated Appropriations Act of 2021 (“CA Act”). This bill was signed into law by President Trump on December 27, 2020, nine months after the CARES Act. The CA Act is the second largest stimulus bill after the CARES Act, with $900 billion of COVID-19 relief, yet represents less than half of what was originally proposed by Democrats. The CA Act consists of 5,593 pages of provisions aimed primarily at funding the federal government, and with COVID-19 relief as an add-on. The following is a brief summary of some of the provisions of the law impacting our clients and policyholders. There are some provisions that will need clarification and additional guidance by the Treasury Department and the IRS. Of course, clients and policyholders should consult with their own tax and legal advisors to determine how the CA Act impacts their individual situations.  Assistance to Individuals and Families 1. Unemployment Assistance. Federal enhancement of unemployment benefits will be provided up to $300 per week for 11 weeks, from the end of December through March 14, 2021. The original federal enhancement provided by the CARES Act expired in July. In addition, two other unemployment programs created by the CARES Act that were set to expire after Christmas have been extended. The first, the Pandemic Unemployment Assistance program, expands jobless benefits to those who traditionally are not eligible for unemployment benefits such as self-employed individuals, free-lancers, “gig” workers, and part-time workers. The CA Act also extends the Pandemic Emergency Unemployment Compensation program to provide for an additional 13 weeks of unemployment benefit payments to those who exhaust their regular state benefits. Furthermore, the CA Act provides that self-employed workers who have at least $5,000 in annual self-employment income but are disqualified from receiving Pandemic Unemployment Assistance because they are eligible for regular state unemployment benefits, may receive $100 per week in federal benefits.There are still a few states that provide extended unemployment benefits due to the pandemic. The funding for these benefits is typically split between the state and federal governments. However, the CA Act provides for full federal financing of the extended benefits through mid-March. Up to 20 additional weeks of payments,