DC Tax Flash: Economic Rescue Bill Still Under Senate Negotiation, House Democrats Offer Plan

Tax Alert
03.23.2020

The Senate remains at a standstill as leaders from both parties and administration officials continue to work on resolving differences on a massive bill to assist businesses and workers idled by the coronavirus. At the same time, House Democratic leaders this evening unveiled their own $2.5 trillion draft bill. With the House in recess, House Speaker Nancy Pelosi (D-CA) said she released the bill in hopes that it will encourage the Senate to "move closer" to the House bill.

So far, the Senate has held two cloture votes on the motion to start debate on a placeholder bill that will be amended to insert the legislative language of a final deal between party leaders. Both votes failed to attain the 60 votes needed to proceed. Even still, with negotiations still underway, an agreement could be announced at any time.

The text of the 1,404-page draft bill (the "Take Responsibility for Workers and Families Act") released today by House Democrats is posted here.

A summary is posted here.

A set of FAQs on the bill's economic assistance payments is posted here.

A set of FAQs on the bill's unemployment compensation provisions is posted here.

​House Ways and Means Committee Chairman Richard Neal (D-MA) issued a press release on the bill this evening.  As noted by the Chairman, the bill includes the following provisions within the panel's jurisdiction:

Support for patients and the strained U.S. health care system:

  • The elimination of cost sharing for COVID-19 treatment in Medicare and private insurance to ensure these services do not bankrupt seniors and families.
  • A payroll tax credit to allow hospitals and other providers afford to quickly purchase additional equipment to care for sick patients.
  • A payroll tax credit that helps hospitals afford to provide care for all COVID-19 patients, including those who are uninsured or underinsured.
  • Dedicated funding to states to provide emergency childcare for health care and other essential workers, or to reimburse the workers directly for childcare costs that they incur during the crisis.
  • The establishment of a one-time, special Affordable Care Act (ACA) Marketplace enrollment period to allow families who are uninsured to get health coverage during the crisis.
  • Enhanced tax credits available to help Americans purchase health insurance and expanded eligibility for these tax credits to meet the needs of Americans during this time of economic and health uncertainty.
  • Increased Medicare outlier payments for any costs over the normal Medicare payment amount for hospitals treating COVID-19 patients.

Assistance for workers and businesses:

  • Economic assistance payments: $1,500 of immediate assistance per individual, up to $7,500 for a family of five. This benefit would be available to anyone with an individual taxpayer identification number, as well as to our nation’s retirees and unemployed individuals.
  • The expansion of the Earned Income Tax Credit for workers without children for the first time in 25 years.
  • An increase in, and expansion of, the Child Tax Credit, and a change to make it fully refundable for families who currently make too little to receive the full credit.
  • A fully refundable employer payroll tax credit tied to the payment of employee wages during the crisis to encourage employee retention.

The expansion and enhancement of unemployment compensation:

  • The creation of a temporary Federal Pandemic Unemployment Compensation (FPUC) of $600 a week for any worker affected by COVID-19 and eligible for state or federal unemployment compensation (UC) benefits. The FPUC, combined with the underlying state unemployment benefit, would replace 100 percent of wages for the average U.S. worker.
  • The expansion of eligibility for unemployment compensation to self-employed workers, individuals who had contracts for work that were cancelled due to the virus, and new entrants to the job market, such as recent college graduates who otherwise wouldn’t qualify.

Miller & Chevalier has formed an interdisciplinary task force, comprised of attorneys in seven main practice areas, to help businesses navigate the complex legal issues created by this global event. More information is posted here


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