COVID Relief Package Clears the Senate; Heads Back to the House

The $1.9 trillion tax-and-spending package can have the following impact to corporate and individual taxpayers:

Corporations:

·       Section 162(m) – current law limits public companies from deducting more than $1 million in compensation paid to the CEO, CFO and the next three highest-paid officers. The Senate bill would expand the list of covered employees to include the next five highest-paid employees.

·       Employee Retention Tax Credit – businesses adversely impacted by Covid may be able to include all wages paid to employees as qualifying wages (not just wages paid to employees not providing services). The credit may also be available to start-ups.

Individuals:

·       The $1,400 direct economic impact payments would be fully phased out when AGI reaches $80K for single taxpayers and $160K for joint filers.

·       The first $10,200 of unemployment benefits received in 2020 would be tax-exempt for households with income below $150K.

The Senate bill will now be sent back to the House for consideration and vote which should take place during the coming week. It is anticipated that the final bill will be sent to the President for his signature before March 14.