President Donald Trump signed into law an emergency $2.2 trillion coronavirus relief package Friday, March 27, 2020, that provides hundreds of billions of dollars for workers, small businesses and industries affected by the pandemic.
The massive spending bill provides a one-time $1,200 tax rebate for individuals making as much as $75,000 a year. Couples who earn less than $150,000 a year and jointly file will receive $2,400. An additional $500 is provided per qualifying child.
The legislation also:
- Authorizes emergency loans to distressed businesses. A provision prevents major government figures — cabinet member, Senators, members of Congress — from qualifying for grants and loans if they have majority control of the business.
- Establishes and funds forgivable bridge loans for small businesses.
- Provides additional funding for grants and technical assistance.
- Increases the maximum unemployment benefit by $600 for 4 months.
“Today we've all acknowledged our nation faces an economic and health emergency of historic proportions due to the coronavirus pandemic — the worst pandemic in over 100 years,” says Nancy Pelosi, speaker of the House.
Businesses with 500 or fewer employees will be eligible for loans from banks for more than 2 months of payrolls and some operating expenses. However, loans to cover salaries that are more than $100,000 won’t qualify for forgiveness. Loans will not be required to be paid back that are covering as much as 8 weeks of payroll expenses. The money must be spent within 2 months to avoid repaying it. In addition, an employee can’t be paid more than $10,000 in the 2-month span if the amount is to be forgiven.
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The legislation also has bankruptcy provisions, which sunset within a year that include:
- Amending the Small Business Reorganization Act of 2019 (SBRA) to increase the eligibility threshold for businesses filing under new subchapter V of chapter 11 of the U.S. Bankruptcy Code from $2,725,625 of debt to $7,500,000. The eligibility threshold will return to $2,725,625 after one year.
- Amending the definition of “income” in the Bankruptcy Code for chapters 7 and 13 to exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy.
- Clarifying that the calculation of disposable income for purposes of confirming a chapter 13 plan shall not include coronavirus-related payments.
- Explicitly permitting individuals and families currently in chapter 13 to seek payment plan modifications if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.
The pandemic has resulted in the filing of 3.3 million unemployment claims last week, the Labor Department reported Thursday. By comparison, about 200,000 filings were made the previous week.
“We didn’t invite it,” says Kevin McCarthy, House minority leader. “We didn’t ask for it. We didn’t choose it. But we will fight it together — until we win, together.”
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