On December 21, 2020, Congress passed a $2.3 trillion government funding and coronavirus relief measure, the Bipartisan-Bicameral Omnibus COVID Relief Deal. The package will keep the federal government running for the rest of the fiscal year, provide billions of dollars in aid to small businesses, extend unemployment programs, deliver resources to support vaccinations, and more.
Of particular interest to U.S. metalcasters is that the legislation notably includes provisions that AFS actively advocated over the past few months – protecting small business owners by restoring the deductibility of Paycheck Protection Program (PPP) forgiven expenses, allowing for another targeted round of PPP for small businesses challenged by the pandemic, and providing a simplified forgiveness process for PPP loans less than $150,000.
“Our industry continued to make our voices heard in Congress, ensuring these important PPP provisions to support metalcasters were maintained and expanded as we continue to navigate through this unprecedented crisis,” said American Foundry Society CEO Doug Kurkul.
Here is a breakdown of what’s inside the $900 billion COVID-19 stimulus package of particular interest to the U.S. metalcasting industry:
PPP Program
- $284 billion for the Paycheck Protection Program (PPP) that was created in the CARES Act. That program’s loans to firms with fewer than 500 employees can be fully forgiven if companies keep people on their payroll.
Transportation
- $45 billion for transportation, including $16 billion for another round of airline employee and contractor payroll support; $14 billion for transit; $10 billion for highways; $2 billion for intercity buses; $2 billion for airports; and $1 billion for Amtrak.
Energy
- $35.2 billion in research and development spending authorizations over the next decade in a clean energy innovation bill.
- One-year extension of the production tax credit for wind and other renewables.
- Two-year extension of investment tax credit for solar energy projects.
- Increased spending and the demonstration of several new technologies to help combat climate change — including energy storage, carbon capture, direct air capture and advanced nuclear, among others.
Pandemic Relief
- Unemployment Insurance: Provides for an additional $300 per week for all workers receiving unemployment benefits, through March 14, 2021.
- Direct Payments: An additional round of Economic Impact Payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent.
Tax Breaks:
- Allows small businesses to deduct expenses associated with their forgiven PPP loans, in addition to expanding the employee retention credit intended to prevent layoffs.
- Extends and expands the CARES Act refundable payroll tax credit for “eligible employers” affected by COVID-19 through June 30, 2021.
- The credit percentage is increased from 50% to 70%;
- The amount of qualifying wages per employee is increased from $10,000 for the year to $10,000 per quarter;
- The gross receipts test is changed from a 50% quarterly decline when compared to the prior year quarter to a 20% decline;
- The full-time employee threshold is increased from 100 to 500 employees;
- Employers can claim the credit and participate in the Paycheck Protection Program but with restrictions to prevent double dipping;
- Codifies IRS guidance whereby health plan expenses can be counted as qualified wages when employers pay no other wages; and
- New employers are eligible for the credit.
- Tax incentives for investing in low-income areas and hiring workers from disadvantaged groups would be extended for five years.
- Payroll tax subsidy for employers offering workers paid sick leave and boosts the Earned Income Tax Credit.
- Rolls over a variety of temporary tax breaks known as “extenders,” some for multiple years.
- Temporarily extends tax breaks for renewable energy, including incentives for wind energy and carbon capture.
- Two-year deductions for business meals.
The complete text of the legislative package can be found here
Republicans and Democrats hope to work toward at least one more relief package early next year in the new 117th Congress. The business community and GOP will look to include liability protections from lawsuits for businesses or schools that were open during the pandemic. Democrats, meanwhile, will work to include a large pot of money for state and local governments. AFS will remain actively involved in any new relief package with the new Congress and new Administration as we move into 2021.
If you have any questions regarding the package, contact Stephanie Salmon, AFS Washington Office, ssalmon@afsinc.org