Phase 4 COVID Relief Plan: A look at what it potentially could contain
Numerous stimulus measures passed by Congress to help curb the economic downturn due to COVID are set to expire at the end of this month. This has motivated Congress to urgently work on a phase four COVID relief plan. In May, the House of Representatives passed a 3.5 trillion COVID relief plan but the Senate is working on something a little more conservative. With the information coming from Capitol Hill is ever-changing, the actual relief package will probably look much different than what we are hearing today.
Here is what we know so far:
- Direct Stimulus Payments - The phase four package will likely have direct stimulus payments but will be smaller and will only go to lower-income individuals. The last package included $1,200 payments for taxpayers whose income was less than $75,000 per year or $150,000 for a married couple. Talks have been focusing on individuals making less than $40,000 per year and reducing the payment amounts.
- Provisions on PPP Loans - Thousands of businesses across the country received Paycheck Protection Program loans to help maintain staff levels and keep the doors open. Currently, the expenses covered using these loans are not tax-deductible if they were forgiven. The next relief package may include a provision to change that and allow businesses to deduct these expenses.
- Revised UI Benefits - The CARES Act included enhanced unemployment insurance benefits, which gave an additional $600 per week in addition to the existing state benefits. This program is set to expire at the end of July. When it came time to rehire employees after restrictions were lifted and businesses began to open, many employers found this difficult because previous employees were earning more on unemployment than at their former jobs. To avoid that issue, while still ensuring laid off or furloughed workers have support, lawmakers are looking at more targeted subsidies. When combining the state benefits and the federal benefits this would replace 80 to 90 percent of a worker's former wages. A $400 maximum weekly federal benefit has been discussed.
- Business Liability Protections - Liability protection for businesses operating in good-faith during the pandemic will likely receive some traction in the phase four relief bill. Senate Majority Leader Mitch McConnell has alluded that this will be included and numerous businesses have expressed this as a primary need.