The $2 Trillion Coronavirus Stimulus Package: Provisions for Independent Contractors and Other Key Details for the Promo Industry
The Senate on Wednesday passed the record-shattering $2 trillion coronavirus stimulus package aimed at rescuing the foundering U.S. economy. The bill is expected to pass the House on Friday before moving to President Trump for final approval. The President has already said he’d sign off. We looked through the full text of the bill and consulted various online sources to see how the legislation applies to the promo industry. Here are some key details:
Assistance for small businesses
Businesses with fewer than 500 workers can apply for loans of up to $10 million to cover payroll costs, health care benefits, rent, utilities and certain other expenses. These loans are government backed and forgivable. In a provision aimed at keeping workers employed, parts of these loans will not be forgiven for any business that lays off workers.
The bill allots a total of $349 billion for loans to small businesses under the Small Business Act and $10 billion for emergency relief grants. For small businesses, there are also provisions for small-dollar advances up to $10,000 to cover paid sick leave, maintain payroll, meet increased costs due to interrupted supply chains, make rent or mortgage payments, and more. These grants would not need to be repaid. Distressed companies can receive bailouts from a $425 billion fund controlled by the Federal Reserve.
Relief for individuals
For jobless workers, the bill enhances unemployment checks by $600 a week for four months. This is in addition to existing state benefits, which according to CNN average $200 to $550 a week. A new pandemic unemployment assistance program extends jobless benefits to anyone unemployed or unable to work as a direct result of the coronavirus outbreak. Jobless insurance would also be extended by 13 weeks.
The bill will also provide stimulus checks of $1,200 for individuals or $2,400 for married couples, with $500 per child under the age of 17. These payments carry certain stipulations based on adjusted gross income. Individuals making more than $99,000, for example, would not qualify.
— Reuters (@Reuters) March 26, 2020
Provisions for independent contractors and sole proprietors
Under the legislation, the unemployment benefits outlined above would extend to independent contractors and sole proprietors. Self-employed individuals can also defer the 6.2 percent social security tax this year, to be repaid over 2021 and 2022.
Tax credits for retaining payroll
Businesses that can show a 50 percent loss compared to the same quarter of previous years can receive a tax credit for keeping employees on payroll. According to Politico, they’d be refunded half of what they spent on wages (up to $5,000 per employee). However, businesses that take these tax credits would not be eligible for certain Small Business Act loans.
Relief for promo buyer markets
The bill allots $500 billion in loans, loan guarantees and investments for large companies across hard-hit industries. According to the New York Times, it provides significant boosts for hotels, restaurants, grocery stores and other retailers, including a provision that could grant a combined $15 billion a year in tax savings for these industries. Hotel and restaurant chains would also qualify for small-business benefits in the stimulus package even if they have more than 500 employees, the limit to qualify as a small business.
Note: As the full text of the bill runs 880 pages, there are likely details or provisions we missed. We'll keep you updated on any new information as it becomes available.