The Continuing Appropriations Act, 2021: $900B stimulus. What’s in it for us?

On December 27, 2020 the President signed the Continuing Appropriations Act of 2021 making it law and then avoiding a government shutdown while, among other things, addressing some issues facing those affected by the pandemic. Here are the COVID-19 related items included in the 5,539-page legislation. The most detailed breakdowns so far are here at the Washington Post and New York Times.

  1. The law extends and increases Unemployment Benefits until March 14, 2021:
    • Provides $300 dollars in additional benefits to those receiving unemployment. While this is less than the $600 extra benefit under the CARES Act that expired in July 2020, it effectively keeps the $300 extra benefit under Executive order that was set to expire at the end of 2020 and makes it easier for states to handle.
    • Continues Pandemic Unemployment Assistance (PUA) relief for self-employed, gig workers and other non-traditional employment workers. Essentially, continuing unemployment for these workers as well.
    • Continues Pandemic Emergency Unemployment Compensation (PEUC) which extends federal unemployment compensation when state unemployment benefits are exhausted. Under most state unemployment programs there are 26 weeks of benefits. The CARES Act extended that another 13 weeks. But the CARES Act extension has expired. With many sure to lose their benefits unless extended again, this continues the ability of individuals to keep unemployment benefits for the time being (11 more weeks). The law would increase the number of total weeks an individual may claim regular unemployment benefits and PUA or PEUC to a total of 50 weeks (26+13+11).
  2. Direct payments will be made to some individuals, but the amount of the payment will be less than the amount originally provided under the CARES Act.
    • $600 to individuals or $1,200 to married couples. Individuals making less than $75,000 in 2019 or married couples filing jointly making less than $150,000 in 2019 would qualify for the full amounts. The payment will be reduced or “phased out” for those filing single with incomes from $75,001 to $87,000 and for those married filing jointly $150,001 to $174,000. These income ranges differ from the CARES Act
    • $600 per dependent child under 17.
    • These payments are available to households with mixed immigration status now as well.
    • If you made too much in 2019 but make less in 2020 making you eligible for the payment when you file your 2020 tax return there will be a way to claim this money in the form of a refundable tax credit.
  3. It renews and expands qualifications for the PPP program. This popular program provides potentially forgivable loans to small companies so they may stay open during the pandemic.
  4. Creates funding for low-income and minority community development to help mitigate economic damage to those communities.
  5. Gives funds for relief to transit agencies, airlines and airline contractors, airports, state DOTs, the motorcoach industry, and Amtrak.
  6. Funding is provided for COVID-19 vaccine procurement and distribution, for the states to do testing, tracing, and mitigation programs, and mental health treatment and research related to the pandemic effect on mental health.
  7. Funding is provided to help schools.
  8. Low-income households, or households where a member is recently unemployed may be eligible for up to $50 for broadband internet access from their provider. The law will provide funding to providers to have them offer discounts to maintain or get access to broadband for these households.
  9. Assistance for renters is continued and expanded:
    • Moratorium on eviction extended to January 31, 2021.
    • Renters may apply for funds to pay past due and future rent.
    • Renters may apply for funds to pay for utilities and energy bills and prevent shutoffs.
    • Native American housing entities will be assured of $800 million for their renters.
  10. If you have a Flexible Spending Account (FSA) your employer may allow you to carry over all unused health care or dependent care money still in the account at the end of the year and use it in 2021. The same would be true for unused 2021 money that you wish to carry over into 2022. The law also allows employers to raise the last eligible age for children’s dependent care to 13, from 12, for the 2020 plan year.
  11. While not pandemic related, a very important part for you as an individual may be an end to surprise billing for medical bills – the relief is somewhat limited but should be of some benefit to avoid that out of network surprise large bill.
  12. In an incentive to some employers, there is a tax credit for paid sick leave for employees.
  13. There is an increase in food stamp funding (SNAP benefits).
  14. Student Loan Repayment Assistance from employers is extended. The CARES Act earlier amended the Internal Revenue Code to permit employers to pay up to $5,250 of an employee’s existing student loans (including interest) on a tax-free basis through an educational assistance program for payments due from March 27, 2020 to December 31, 2020. The employer could pay the lender directly or reimburse the employee for the employee’s loan payments. The law now extends the end date for student loan repayment assistance to December 31, 2025.

Note: The law does not extend the IRA and 401(k) withdrawal or loan provisions of the CARES Act. The law also does not extend the mortgage forbearance provisions under the CARES Act.

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