Coronavirus Relief Bill Passes Congress; Trump Threatens Veto
After months of struggling to pass a coronavirus relief package, the U.S. House and the U.S. Senate passed one late on December 21. Several items advocated by PIA were included in the final bill. But the next day, December 22, President Trump cast some doubt on the fate of the package.
Trump on Tuesday night asked Congress to amend the nearly $900 billion stimulus and spending bill, describing the legislation as “a disgrace” and suggesting he would not immediately sign off on aid for millions of Americans. In a video posted to Twitter, Trump called on Congress to increase the “ridiculously low” $600 stimulus checks to $2,000 and outlined a list of provisions in the final legislation that he described as “wasteful spending and much more.”
If Trump were to veto the bill, there are conceivably enough votes in the House and Senate for an override; the Senate vote to approve it was 91-7. In the House, the margin for passage was 327-85. As of this writing, this situation is in a state of flux and is still developing.
“Given the immense challenges facing small businesses we would have preferred coronavirus relief had been passed several months ago, however we are pleased that several of PIA’s priorities were included in the final bill,” said Jon Gentile, PIA Vice President of Government Relations. While the broad provisions of the of the legislation have been widely disseminated, several of the topics addressed in the bill were subjects of PIA advocacy.
PPP Streamlined Loan Forgiveness
PIA, along with allies in the business community, was successfully able to have streamlined loan forgiveness included in the coronavirus relief package. The provision is based on legislation championed by Senator Kevin Cramer (R-ND) and Rep. Chrissy Houlahan (D-PA) to create a simplified PPP loan forgiveness application for loans under $150,000 whereby the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spend on payroll costs. PIA made this issue a top priority since the late spring to ensure qualifying small business owners are able to seek PPP loan forgiveness in an easy manner.
Surprise Tax on PPP Loan Recipients Prevented
The Internal Revenue Service (IRS) this fall issued a ruling that undercut the clear intent of Congress in the CARES Act and transformed tax-free PPP loan forgiveness into taxable income, raising the possibility of a surprise tax increase of up to 37 percent on small businesses when they file their taxes for 2020. In response, PIA launched a national grassroots effort and advocated to Congress the fact that small business owners should not be taxed on desperately needed relief which the PPP purported to provide tax-free.
“PIA is pleased that our efforts paid off and the bill specifies that forgiven Paycheck Protection Program (PPP) loans will not be included in taxable income,” said Gentile. “It also clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan, effective as of the date of enactment of the CARES Act and applicable to subsequent PPP loans and overturns IRS Notice 2020-32.
“We’re pleased Congress included this provision that will prevent the IRS from hitting the five million qualifying businesses that received PPP loans with a surprise tax increase when they file their taxes for 2020,” Gentile added. PIA is urging President Trump to sign the legislation into law.