Federal lawmakers are working today to pass a $900 billion COVID-19 economic relief bill before funding for the government runs out at midnight tonight. The bipartisan legislation will provide critical aid for individuals and small businesses to help them meet their expenses, including rent payments.
Members of Congress agreed on the elements of the deal last night. It includes $166 billion in direct checks to individuals and $120 billion in supplementary federal unemployment payments. It also includes $325 billion in aid for the hardest-hit small businesses with 300 or fewer employees by extending the Paycheck Protection Program (PPP) until March 31, 2021, and it allows deductibility for certain expenses attributable to forgiven PPP loans. It provides $12 billion in aid to Community Development Financial Institutions and Minority Depository Institutions to continue serving borrowers and communities disproportionately impacted by COVID-19. In addition, the bill includes $25 billion to provide emergency rental assistance for past due rent, future rent payments and utility and energy expenses, and it extends the Centers for Disease Control rental eviction moratorium through Jan. 31, 2021.
The legislation enhances and extends for wages paid before July 1, 2021 the CARES Act’s employee retention and rehiring tax credit (ERTC), a payroll tax credit for employers who retain employees during the COVID-19 crisis. Employers are eligible if their operations are fully or partially suspended due to a governmental shut-down order or if they experience a particular reduction in quarterly receipts due to the crisis.
Correcting a drafting oversight in the 2017 tax reform law advocated by Nareit and other real estate organizations , the legislation applies a 30-year depreciation period to multifamily properties placed in service prior to 2018 when their owners elect out of the section 163(j) interest limitation. The deal also permanently extends section 179D, allowing an immediate deduction for certain building improvements that meet updated energy efficiency standards, but it does not conform this deduction to the calculation of REIT earnings and profits.
Two elements that were sticking points in reaching an agreement last week were dropped from the deal over the weekend. They included funding for state and local governments, a Democratic priority, and COVID-19 liability protections for businesses, a Republican priority. Also, negotiators agreed to include language in the final bill to repurpose $429 billion of unobligated funds authorized under the CARES Act to facilitate direct and indirect lending in response to the crisis, another final point of contention.
Some lawmakers are saying the size of the aid package is insufficient and are calling for additional economic relief legislation in 2021.