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DC Tax Flash: Senate Modifies and Clears Virus Relief Reconciliation Bill

Tax Alert

After several days of debate, amendments, and votes, the Senate today approved a modified version of the House-passed virus relief reconciliation bill (H.R. 1319). It passed on 50-49 party-line vote. (One GOP Senator was absent, which meant Vice President Harris's vote was not needed.) The $1.9 trillion bill will now go back to the House for approval, which would clear the bill for the president's signature – if passed without further changes.

During consideration of the bill, the Senate debated more than 30 amendments and motions, almost all of which were rejected. One of the biggest modifications to the bill came after Democratic leaders negotiated revisions with Sen. Joe Manchin (D-WV) and others that assured its final passage. The amendment sought by Manchin added provisions that would:

  • Lower to $300 the federal unemployment benefit bonus, but extend funding for it through September 6, 2021
  • Allow up to $10,200 in untaxed unemployment benefits for those with incomes under $150,000
  • Extend the tax rules for excess business loss limitations for an additional year

Just before the vote on final passage, the Senate also adopted a final set of revisions offered by Majority Leader Chuck Schumer (D-NY). He said the amendment made mostly clerical changes, but Republicans objected. Senate GOP leaders argued that the 50-page amendment was much more than a technical clean-up package. As an example, they cited a major change in the qualifying conditions for receiving worker's compensation in Schumer's amendment.

The text of each amendment adopted during Senate debate should be released soon, as well as the full text of the bill as passed by the Senate. 

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