This article contains information that is current as of mid-day May 14, 2020. Check back soon for updated information on the HEROES Act.
On May 12, House Democrats released their vision of the next phase of COVID-19 economic relief. The proposed Health and Economic Recovery Omnibus Emergency Solutions Act (the bill or HEROES Act) weighs in at over 1,800 pages and would cost at least $3 trillion. The HEROES Act, which some say highlights many Democratic Party priorities, is slated to be voted on in the House as early as May 15. While the HEROES Act is generally expected to be a non-starter in its current form in the Republican-controlled Senate, the bill’s many provisions would seem to be an indicator of the items that Democrats will press for in future negotiations with Republicans for any final version of a Phase IV COVID-19 economic relief and stimulus package.
A review of the Title by Title Summary (link) notes that the bill includes, but is not limited to, the following provisions:
Improvements to, and additional amounts paid, under the Economic Impact Payment Program to individuals ($1,200 per family and up to $6,000 per household)
Additional Earned Income Tax provisions increasing eligibility and benefits
Increases the Child Tax Credit and raises the eligible age of children to include 17-year-olds
Increases the Child and Dependent Care Tax Credit
Doubles the exclusion for employer-provided dependent care assistance to $10,500
Changes flexible spending account arrangements to allow for greater carryover of unused amounts and provides a longer term to be able use the carryover amount to 12 months
Eliminates the SALT deduction limit for 2020 and 2021
Allows greater above-the-line deduction for teachers and new deductions for first responders
Provides for an employer payroll credit for expenses reimbursed or paid for the benefit of employees for personal living, family, and funeral expenses related to COVID-19
Expands eligibility and increases benefits related to the employee retention credit
Provides a new payroll credit for certain fixed business expenses for eligible employers with up to 1500 employees and $41.5 million in revenue
Provides a business interruption credit for eligible self-employed individuals
Expands the rules for sick and FMLA credits provisions of the first phase of relief – the Families First Coronavirus Response Act
Would allow payroll tax deferral for employers receiving PPP loans
Would allow loan forgiveness of EIDL loans to be excluded from income
Repeals the CARES act adjustment to the Excess Business Loss Rules and makes the limitation permanent (not just through 2026).
Would not allow NOL carrybacks for losses in 2019 and 2020 and prohibits taxpayers with excessive executive compensation, excessive stock buybacks, or excessive dividends from being able to carryback losses
Changes rules of the PPP loan program providing greater flexibility and enhancing program benefits
Employers would be required to develop and implement a comprehensive infectious disease exposure control plan
Extends unemployment benefits
Provides for numerous education relief programs
This bill, at the time of the release of this article, has not passed the House yet and likely will not be approved by the Senate. Therefore, it is much too early to act upon individual provisions contained in this bill. This article is meant to keep you informed of provisions that could be included in some form in future legislation. It will be important to monitor future developments and negotiations on the provisions progress.
Please continue to monitor Our Thoughts on COVID-19 Resource Center for the latest on commentary and analysis of COVID-19 legislation and guidance affecting you and your business. If you have any questions, please don’t hesitate to reach out to your Schneider Downs tax advisor.
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