The HEALS Act (AKA Stimulus Check 2): What We Know Today
Congress went back into session this week, and one of the items at the top of the agenda was additional coronavirus-related funding. Unfortunately, politics are going to play a large part in determining how long taxpayers have to wait to find out exactly what the new plan will entail. Here is a little bit of what we can expect in the new stimulus package.
First, both Democrats and Republicans agree that individual taxpayers should receive another round of direct payments. In all likelihood, this portion is going to provide $1,200 to individuals, $2,400 to married couples, and a $500 payment for each dependent. In the CARES Act, the cutoff to receive a $500 dependent check was age 16 and younger and college students under 24 were not eligible to receive a check. However, the proposed HEALS Act, aka stimulus check 2, would give direct payments to individuals making under $99,000 a year and couples making under $198,000. It would also allow for parents/guardians to receive an additional $500 for a dependent of any age.
Politicians have also discussed the extension of unemployment benefits for unemployed taxpayers. The program originally created by the CARES Act provided for an extra $600 a week to those on unemployment, but the program has already expired. Under the HEALS Act, we are most likely to see a similar program with less than the extra $600 a week being given to unemployed individuals.
Business owners, if you haven’t taken advantage of Payroll Protection Programs loans, you may have another chance. PPP loans under the CARES Act were governed by a business’ payroll. However, under the current proposals of the HEALS Act, the new set of loans would look to benefit small businesses that have lost 50% or more of revenue over the last year. The HEALS Act also calls for further refundable tax credits to businesses known as employee retention tax credits. Under the program, an employer can receive the refundable tax credits for wages paid to an employee during the pandemic. The employer can then use the credit to subtract from the taxes they owe. Since the tax credit is refundable, the debt may be less than zero resulting in a refund owed to the employer.
While these are the proposals that are most likely to pass, they may look different from the final product since nothing has been set in stone yet. Nonetheless, the HEALS Act should help keep small businesses afloat during these trying times. The professionals at The Center for Financial, Legal, and Tax Planning are more than knowledgeable with regards to any questions you may have with regards to direct payments, PPP loans, or any other taxation matter. Please contact us at (618) 997-3436 with any questions.