Congress Passes $2 Trillion Economic Stimulus PackageWorldwide ERC® - Mar 27 2020
The U.S. Congress passed a massive economic relief bill to help with the effects of restrictions imposed to slow the spread of COVID-19. It includes relief Worldwide ERC® requested in letters sent to congressional leaders.
Earlier this afternoon, the U.S. House of Representatives voted by voice vote to pass the Coronavirus Aid, Relief, and Economic Security Act also known as the “CARES Act” (S. 3548). The legislation now goes to President Trump, who has stated he will sign immediately.
The CARES Act will provide approximately $2 trillion in economic relief to employees and employers in response to the financial impact of the coronavirus and restrictions necessary to contain its spread. The United States Senate had voted on 25 March by 96 to 0 in favor of passage of the CARES Act.
Worldwide ERC® had appealed to the Congress for financial assistance for our members to help mitigate losses due to global travel restrictions, which have brought employee relocation and related services to a halt.
Here are the specifics of the four provisions Worldwide ERC® requested be addressed and the outcome in the CARES Act.
Payroll Tax Holiday
Worldwide ERC® had requested a suspension of payroll taxes for both employees and employers or a direct payment to employees and payroll tax holiday for employers. The CARES Act provides a $1,200 payment to individuals and $500 for dependents with the amount phasing out for earners about $75,000 and household above $150,000. The payroll tax for employers has been suspended starting upon enactment of the legislation through the end of 2020. Employers will be able to hold onto the 6.2% share of the tax put then pay 50% by the end of 2021 and the remaining 50% by 31 December 2022.
Payments for Moving Companies
The American Moving and Storage Association (AMSA) and International Association of Movers (IAM) requested 60% of the payments made for the same period last year by the Department of Defense to offset the suspension through May 11 of the household goods of U.S. service members. Worldwide ERC® had noted our support for the AMSA and IAM request in our letters. While the CARES Act focuses on broad business relief and did not include a provision explicitly for moving companies, several provisions within the legislation would provide relief to them.
Loans for Small Businesses
Worldwide ERC® had requested an expansion of loans for all companies but in particular small to medium size businesses. The CARES Act includes several provisions for loans varying on the number of employees of the employer, but a new Paycheck Protection Program would provide loans to small businesses that would not need to be repaid if they retain their employees and meet other requirements.
Restoring the Moving Expense Deduction and Exclusion
Worldwide ERC® had sought to at least temporarily reinstate the moving expense deduction and exclusion, which was eliminated through the end of 2025. This request would allow those employees and employers involved with relocations in 2019 to receive an immediate benefit with the filing of 2019 tax returns. The CARES Act did not include language to reinstate the deduction and exclusion.
While the CARES Act will likely be by far the largest economic relief package to address the impact of the coronavirus, it is likely not to be the last effort by the Administration and the Congress. Worldwide ERC® will continue to push for financial relief for our members.