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Taxpayer asks:

Are tax rates locked in at start of year ??

I’d like to do a Roth conversion in early Jan 2021.  Can I count on Trumps current tax rates ?  If Biden would wins, could he change the rates before year end ??

Taxgirl says:

Even though we like to call tax policy names associated with the President in office at the time of the change or rate (ie “Bush tax cuts”), it’s not actually the President who is responsible for tax policy: that’s Congress’ role.

The rules that changed as a result of a Tax Cuts and Jobs Act (TCJA) are slated to stay in effect largely through 2025. That won’t change if we get a new president. It will only change if Congress changes the law.

And while it’s true that the President has influence over tax policy, that doesn’t mean that there’s automatic change. Consider the TCJA. President Trump took office on January 20, 2017. The House didn’t pass the TCJA until December 19, 2017 (and did it again the next day because of a procedural issue). The Senate passed the bill on December 20, 2017. The TCJA was signed into law by President Trump on December 22, 2017, almost a full year after the President took office. Even then, most of the provisions of the TCJA didn’t go into effect until 2018.

So that’s a long way of saying that I don’t expect any significant tax changes in 2020, even if there’s a new president. That’s especially true if the composition of the House and Senate doesn’t change much (remember, Congress has to be on board with any presidential tax policy).

And even if a tax bill gets pushed through in 2021, it’s unlikely to apply to the 2021 tax year. Most tax bills aren’t retroactive especially when it comes to tax rates for exactly the reason you mentioned (reliance on current law when making financial and tax decisions). I could be wrong – because Congress has been unpredictable of late – but such a change would be unusual at best.

Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.

It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter.

S is for Sunset.

Tax rules change a lot. But some of what is sometimes billed as change isn’t so much new as it is a reversion to the old. Take the Tax Cuts & Jobs Act (TCJA), for example. Passed in 2017, most of the provisions that apply to individual taxpayers, including individual tax cuts, the increased standard deduction, and the expanded child tax credit, are set to expire at the end of 2025. When that happens, the law goes back to the way that it was before the provisions were implemented. When that happens, it’s called a “sunset,” which, I know, sounds way prettier than it actually is.

But how do we get to the point where Congress opts for a sunset instead of permanent change? You can thank the Congressional Budget Act of 1974. As part of the CBA, Congress created something called reconciliation. The idea of reconciliation is to allow certain spending, revenues, and debt-limit legislation to go through the bill process at a faster pace – there are fewer procedural hoops and reconciliation doesn’t allow for long debates in the Senate. Also, the minority party can typically filibuster a bill in the Senate unless there are 60 votes to move ahead, but that’s prohibited under reconciliation.

Both the House and Senate can tackle their own versions of reconciliation bills. They start in each chamber as budget resolutions with reconciliation instructions. But if the two chambers come up with different versions, they have to work out the differences. If and when they reach a compromise version, both then take an up-or-down vote on the final version: the final versions in the House and the Senate must be exactly the same.

Of course, as Congress likes to do, it tried to broaden the use of reconciliation for other things. That led to the establishment of the Byrd Rule in the Senate. Under the Byrd rule, named after former Senator Robert Byrd (D-WV), any legislation that would significantly increase the federal deficit beyond the ten-year budget window, or is otherwise “extraneous” can be blocked. “Extraneous” provisions include those that change Social Security or are outside the jurisdiction of the committee. If the Byrd rule applies, instead of a simple majority, 60 votes are needed to push a reconciliation bill through the Senate.

So what does that mean? When Congress can’t agree beyond a simple majority, they necessarily must frame it to only last for a few years. The result is a sunset.

Of course, the TCJA isn’t the first time we’ve seen a sunset. Other laws, like the Economic Growth and Tax Relief Reconciliation Act of 2001, the Jobs and Growth Tax Relief Reconciliation Act of 2003, and the Health Care and Education Reconciliation Act of 2010, also included sunset provisions.

You can find the rest of the series here:

After weeks of will they or won’t they, they did: House Speaker Nancy Pelosi announced a new COVID-19 economic relief proposal. The bill is known as the Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act.

Just like the last House proposal (which eventually became the CARES Act), the HEROES Act bill is hefty, weighing in at 1,815 pages. You can read it here (downloads as a PDF).

Here’s a look at some of the highlights:

Spending. The first hundred pages or so would provide additional funding for various government agencies for COVID-19 programs. And yes, the bill would provide additional funding for the Internal Revenue Service (IRS) “to prevent, prepare for, and respond to coronavirus, including for costs associated with the extended filing season.”

CARES Correction: Dependent Child. Under the CARES Act, for purposes of getting the $500 per child, the law used the same definition for a child as you’d use for the child tax credit. The sticking point for most parents for this purpose was the age: the child must be under age 17 at the end of the tax year. That meant that taxpayers were not entitled to receive the $500 additional payment for a child above the age of 16, even if they lived with you and eat your food and spend your money and sleep in your house. I previously said, about it, “…if you want to be mad at someone, be mad at Congress.” You were. And they heard you. And the fix is just this easy: the reference to the child tax credit would be replaced by the term “qualifying dependent.” If the bill passes, if you have claimed your college-aged kid AND your mom on your taxes, you’d now get a check for both.

CARES Correction: SSN. Also, under the CARES Act, you had to have a Social Security Number (SSN) to get a check. As did your spouse. If one of you (assuming you filed jointly) had an ITIN instead of an SSN, you would get nothing. If the bill passes, if you had a valid SSN and your spouse did not, your spouse would still get nothing, but you’d get your payment.

CARES Correction: Offsets. The only offset to stimulus checks under the CARES Act was for past-due child support. The HEROES Act would change that… my guess is because of the difficulties involved in administering the offset piece.

CARES Correction: Levies & Garnishment. While only child support was offset by the feds under the CARES Act, once payments hit bank accounts, they could be subject to seizures and garnishment to satisfy existing liabilities. The HEROES Act would require the payments to be coded in an obvious manner so that banks would not allow payments to be seized to satisfy certain legal obligations.

CARES Clarification: Representative Payees. One of the points of confusion under the CARES Act was whether representative payees of Social Security (SSA), Veterans Affairs (VA), and Railroad Retirement Board (RRB) benefits could accept payment. The answer under the HEROES Act would be yes, provided that the representative payee used the payment for the beneficiary.

New Checks. The HEROES Act calls for additional stimulus checks. As before, checks would be $1,200 per adult ($2,400 in the case of a joint return), but with an additional $1,200 per dependent (as opposed to $500). The eligibility criteria are much the same as before – even the phaseouts are the same – with the exceptions of those CARES Act corrections noted above (the revised definitions and rules would be used for the new checks). And this time, Congress clearly states that payments should be automatic for those receiving Social Security retirement or disability benefits (SSDI), SSI, RRB, or VA benefits. And one more thing… the new checks and notices that accompany them will not have the signature or likeness of the President, Vice President, Cabinet Official, or any elected official.

Earned Income Tax Credit (EITC). The EITC would be expanded. Currently, if you do not claim a qualifying child for the EITC, you are eligible if you meet the income rules, have your main home in the United States for more than half of the tax year, cannot be claimed as a dependent or qualifying child on anyone else’s return, are at least age 25 but under age 65 years old at the end of the tax year. The HEROES Act would change the minimum age to 18 for qualified former foster youth, and would up the maximum age to under 66 (so, 65). The phaseouts would also increase.

Child Tax Credit (CTC). The CTC was expanded under the Tax Cuts and Jobs Act (TCJA) but would be improved (their word) for 2020. The amount of the credit would be boosted, and the age for qualifying children would be moved to 17 (not under age 17).

Employer-Provided Dependent Care Assistance (EPDCA). The amount available under the EPDCA would be doubled for 2020.

Flexible Spending Arrangement (FSA). The HEROES Act would allow taxpayers to carry amounts from FSA forward into 2021. This would apply to FSAs for health care and dependent care.

State and Local Taxes (SALT). The House is trying again to eliminate the cap on SALT deductions for 2020 and 2021. You may remember that those were capped at $10,000 under the TCJA.

Above the Line Deductions. The HEROES Act would increase the above-the-line deduction for teachers and would allow first responders a similar deduction. That means that those deductions could be claimed even if taxpayers don’t itemize (the deduction would be in addition to the standard deduction).

Payroll Tax Credits & Deferrals. Employers would be allowed a payroll tax credit equal to the applicable percentage of the qualified pandemic-related employee benefit expenses. Additionally, the amount allowed as a credit under the Employee Retention Credit (ERC) would be increased from 50% to 80% and the $10,000 cap for all quarters would be $45,000; phase-ins would also apply for the credit reduction. A similar credit would apply to self-employed persons. An additional credit would be allowable for fixed expenses and payroll tax deferrals would be allowed for recipients of Paycheck Protection Program (PPP) loans.

Exclusions from Gross Income. Under the HEROES Act, emergency financial aid grants made to students would be excluded from gross income. The same would be true for loan forgiveness and other business financial assistance under the CARES Act, including those emergency Economic Injury Disaster Loan (EIDL) grants.

Medicaid/Medicare and Healthcare Expansion. The HEROES Act would expand Medicaid benefits for states, as well as subsidized healthcare costs, including those for furloughed workers and those relying on COBRA coverage. 

Retirement Provisions. The CARES Act waived RMDs for 2020. The HEROES Act would extend that relief to 2019 for defined contribution plans and IRAs. But, since you know, it’s 2020, RMDs made in 2019 (as well as 2020) could be rolled back to a plan or IRA without regard to the normal 60-day requirement if the rollover is made by November 30, 2020. 

Unemployment Benefits. The $600/week surplus for unemployment is slated to end on July 31, 2020, under the CARES Act. The HEROES Act would extend it through January 31, 2021. The HEROES Act would also expand other unemployment-related benefits.

Small Business Benefits. Honestly, this could be a separate bill on its own. The bill makes several technical changes to the PPP, including extending the covered period through the end of the year and eliminating the 75/25 payroll split.

Housing/Student/Debt Assistance. The HEROES Act would expand the eviction moratorium and foreclosure protections under the CARES Act to include all renters and homeowners. It would also suspend adverse consumer credit reporting during the COVID-19 crisis, and extend CARES Act student loan payment and consumer protections.

Voting. Yes, again. The idea is to provide mechanisms for voting in federal elections during a state of emergency, public health emergency, or national emergency, including infectious disease. Considering that I’m trying to figure out how the self-quarantine will allow me to vote in my state primaries, I appreciate the idea. But did we need 50-some pages of voting legislation just now? The House felt that we did.

The Kitchen Sink. There’s a *lot* in the bill. And towards, the end, it gets kind of messy. Clearly, other (failed) provisions were tacked on in an effort to push them through. Do we need funding to identify wildlife species that pose a risk to human health? Perhaps. Do we need it now? Perhaps not so much. Do we need additional hate crime legislation? Maybe. Do we need it tucked inside a COVID-19 relief bill? Maybe not so much.

As before, keep in mind that this is just a proposal. It’s long, and it’s dense. I’ve tried to hit the highlights – things I think that you care about. And here’s my takeaway: This isn’t getting through the House and the Senate. It’s too much. So, take this summary with a grain of salt and please don’t run out and spend that new stimulus check that you don’t yet have in hand, or plan your immigration status around potentially extended deadlines. Not everything is going to make it through.

A vote is planned for Friday. Speaker Pelosi said on MSNBC, about the timing, “To those who would suggest a pause, I’ll say the hunger doesn’t take a pause. The rent doesn’t take a pause. The hardship doesn’t take a pause.”

Republican Senate Majority Leader Mitch McConnell is not expected to push the measure forward in the Senate, suggesting that the timing is not right.

Clearly, things are happening at a rapid-fire pace these days. Keep checking back for details.

(Note: On March 27, 2020, the House approved this bill.)

It’s been a long week on the Hill, but the Senate has finally reached an agreement on a bill intended to provide direct economic relief in response to the COVID-19 pandemic. The measure passed late Wednesday by a vote of 96-0: Senators Romney (R-UT), Thune (R-SD), Paul (R-KY), and Lee (R-AZ) did not vote.

COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to Johns Hopkins, as of March 25, 2020, there are 468,523 confirmed cases of COVID-19 in 173 territories and countries. The United States has 66,132 confirmed cases with reported cases in every state.

As a result of the virus, the Senate passed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.” It’s bigger than the original Senate proposal but smaller than the subsequent House proposal. Here are some of the highlights:

Small Business Interruption Loans. The bill would expand the eligibility for small businesses (those under 500 employees) to receive a loan of up to $10 million under the Small Business Act. Loans can be used for payroll as well as paid sick, medical, or family leave, costs related to the continuation of group health care benefits, mortgage payments and rent, utilities, and other debts. Loans could also be extended to sole proprietors, independent contractors and self-employed persons. No collateral would be required, nor any personal guarantee. Loans are eligible for forgiveness if they meet specific criteria.

Unemployment Benefits For Workers. The bill provides unemployment benefits for workers who are out of work; a temporary Pandemic Unemployment Assistance program would provide benefits for those not traditionally eligible for unemployment benefits, including self-employed workers and independent contractors.

Stimulus Checks. Checks will be $1,200 per adult – or $2,400 for married couples filing jointly – and an additional $500 per child.The amount of the checks would start to phaseout for those earning more than $75,000 ($150,000 for joint returns and $112,500 for heads of household). Phaseouts apply: for every $100 of income above those thresholds, your check will drop by $5. So, if you are a single filer earning $75,100, your check will be $1,155 ($1,200-$5). If you are a single filer earning $85,000, your check will be $700 ($1,200-$500). If you do the quick math on that, it means that you’ll phaseout completely (meaning that you’ll get nothing) once you hit $99,000 as a single filer, $198,000 as a married couple filing jointly, or $146,500 for heads of household.

Special Rules For Retirement Accounts. The bill would allow for tax-favored “coronavirus-related” distributions from certain retirement plans of up to $100,000 (the 10% early withdrawal penalty would not apply). Also, income attributable to those distributions would be subject to tax over three years (as opposed to one). Qualifying taxpayers would also be allowed to repay their retirement plans to make up for money withdrawn to pay coronavirus-related expenses (including loans and distributions).

Required Minimum Distributions (RMDs). The proposal would waive RMDs for 2020.

Charitable Contributions Move Above The Line. The bill would allow for charitable contributions up to $300 to be treated as above-the-line deductions. That means that you would not have to itemize to claim those deductions – something that many taxpayers have grappled with because of the increased standard deduction under the Tax Cuts and Jobs Act (TCJA).

Charitable Contribution Limits. The bill would temporarily suspend limits on cash donations for individuals and would modify limits for charitable contributions from corporations. For individuals, the 50% of adjusted gross income limitation would be suspended for 2020. For corporations, the 10% limitation would be increased to 25% of taxable income. It would also increase the limitation on deductions for contributions of food inventory from 15% to 25%.

Payroll Tax Credit For Employers. Employers who hold onto employees during the pandemic would be eligible for a refundable payroll tax credit. The 50% credit would offset the employer’s share of Social Security taxes up to $10,000 of qualified wages per employee. For employers with more than 100 full-time employees, qualified wages are wages paid when they are not providing services due to the COVID-19. For eligible employers with fewer than 100 full-time employees, all employee wages qualify for the credit.

Payroll Tax Payment Delays. The bill would extend the time to submit payroll taxes. The extension for payroll tax would apply to the employer portion of self-employment taxes, too. The provision requires that the tax be paid over the next two years, with half due by December 31, 2021, and the remainder due by December 31, 2022. 

Corporate Tax Payment Delays. Corporations would get extra time to pay payroll taxes. The extension would apply to the employer portion of self-employment taxes, too.

Net Operating Losses (NOLs). Taxpayers and tax professionals weren’t big fans of the TCJA provision limiting net operating losses. Those provisions would be modified for individuals and businesses. Notably, an NOL arising in a tax year beginning in 2018, 2019, or 2020 could be carried back five years.

Increased Interest Expenses For Businesses. The provision temporarily increases the amount of interest expense businesses can deduct by increasing the 30% limitation to 50% of taxable income for 2019 and 2020.

COVID-19 Testing and Treatment. With costs for testing and treatment still a concern, the bill would require group health plans and health insurance issuers offering group or individual health insurance to cover preventive services and provide no-cost testing.

Funding for Nutrition Assistance Programs. The bill would provide funds for food assistance programs, including those for seniors, and would reauthorize the Healthy Start Program. 

Work-Study. The bill would allow some payments to be made to students with work-study arrangements if those students weren’t able to finish their work during the year because of the virus (including virus-related closings).

Student Loans. The bill would increase flexibility for student loans, including allowing colleges and universities to award emergency financial aid grants without regard to the usual need calculation. The bill also allows the Department of Education to exclude some loans for students who were unable to remain enrolled in school as a result of a qualifying emergency (exceptions apply). Waivers also apply to Pell Grant repayments under the same circumstances. 

Suspension Of Student Loans. The bill suspends payments for student loans under the Federal Family Education Loan and Direct Loan programs – without interest – through September 30, 2020. Additionally, collection efforts for those loans will stop during that time, including garnishments and tax refund offsets.

Health Savings Accounts (HSAs) for Telehealth Services. This bill would allow a high-deductible health plan (HDHP) with an HSA to cover telehealth services before a patient reaches the deductible.

Over-the-Counter Medical Products Without Prescription. The bill would allow patients to use funds in HSAs and Flexible Spending Accounts (FSAs) for the purchase of over-the-counter medical products, including those needed in quarantine and social distancing, without a prescription from a physician.

Menstrual Care Product As Qualified Medical Expenses. It’s back! Conspicuously absent from the House bill, the compromise bill would consider amounts paid for menstrual care products as paid for medical care. That would include “a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.” The bill would extend the qualifying medical expenses treatment for menstrual products to your basic healthcare alphabet soup: MSAs, HSAs, HRAs, and the like.

More Funding For Hospitals. The bill includes more money for hospitals and other medical facilities.

Corrections & Modifications. The bill also offers revisions and modifications to existing paid leave bills, including the Family and Medical Leave Act and the Families First Coronavirus Response Act.

Bailouts. The bill would offer loans and other relief to businesses, including the airline industry; the bill does not extend similar assistance to the cruise industry. Limits apply, including restrictions on paying certain highly-compensated employees. And yes, that provision you’ve heard about in the press? It’s in the bill. It would prevent some folks – namely, the President, the Vice President, the head of an Executive department, or a Member of Congress, and their families – from benefiting from the bailouts. Also, there would be an oversight committee to monitor the loans. One more thing: the requirement to offset carbon emissions in exchange for relief has been eliminated.

Aviation Excise Taxes. The bill would suspend federal aviation excise taxes through the end of the year. You may not write a separate check for those taxes, but you do pay (check your tickets).

Housing. This bill would temporarily ban landlords from filing evictions on most renters (this would not extend to vacant or abandoned properties). Homeowners would be afforded a ban on some foreclosures and have additional options for mortgage forbearance for federally backed mortgage loans.

And everyone’s favorite new tax provision: Temporary exception from excise tax for alcohol used to produce hand sanitizer. Our distillers may save us yet! In response, the bill waives the federal excise tax on any distilled spirits used for or contained in hand sanitizer produced and distributed consistent with guidance issued by the Food and Drug Administration (FDA).

The bill was held up temporarily over language that some Senators said would allow workers to be paid more on unemployment than they would while employed. In response, an amendment – the Sasse (R-NE) amendment – was introduced late Wednesday night to limit unemployment payments. The amendment needed 60 votes to pass: it failed by a vote of 48-48.

Keep in mind that the House has not yet voted on the bill. House Speaker Nancy Pelosi (D-CA) had initially hoped to proceed by unanimous consent so that House members would not have to return to Washington. However, it’s more likely that there will be a voice vote by proxy; if that can’t be pushed through procedurally, House members will need a roll call vote. In that event, they will have to return to Washington.

You can read the Congressional Record, which notes the discussion, the vote and the text here (downloads as a PDF). 

This bill is in addition to H.R. 6201, Families First Coronavirus Response Act, which cleared the House last week and passed in the Senate this week. It guarantees free testing or health care coverage for coronavirus testing, and provides paid sick leave for some workers and offers additional funding for seniors, food assistance, and unemployment benefits. You can read more about the highlights of the bill in our prior coverage here. The President signed the bill into law on Wednesday, March 18, 2020. 

It’s also in addition to the $8.3 billion emergency health package, which was passed earlier this month. This most recent bill focuses explicitly on economic aid for workers.

Things are happening at a rapid-fire pace these days. Keep checking back for details.

(Update: The bill passed the Senate on 3/25/2020.)

“It’s good news,” said Senate Majority Leader Mitch McConnell (R-KY) early Wednesday morning.

McConnell continued, “At last, we have a deal. After days of intense discussions, the Senate has reached a bipartisan agreement on a historic relief package for this pandemic.”

The text of the deal has not yet been released, but details from those in Congress suggest that it will closely resemble the bill released by the Senate last week.

The bill is expected to keep in place the Senate version of the stimulus plan, which would allow for checks of up to $1,200 per adult – or $2,400 for married couples filing jointly – as well as $500 per child. The amount of the checks would start to phaseout for those earning more than $75,000 ($150,000 for joint returns) and would disappear entirely for those earning more than $99,000.

The bill is expected to cost nearly $2 trillion. It will include almost $500 billion for companies who are experiencing economic distress. That’s been a sticking point for the House, with Democratic representatives initially concerned over the lack of oversight concerning bailout funds. Yesterday, Secretary of the Treasury Mnuchin signaled that a deal would include tighter controls, and today, Senate Minority Leader Chuck Schumer (D-NY) confirmed that restrictions would be in place. Among them, there is a provision that would prohibit members of Congress, as well as President Donald Trump and his family, from getting loans or other benefits from the bailout.

Included in that amount is a significant amount of funding for hospitals and healthcare workers struggling to deal with the COVID-19 pandemic.

COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to John Hopkins, as of March 25, 2020, there are 435,006 confirmed cases of COVID-19 in 171 territories and countries. The United States has 55,238 confirmed cases with reported cases in every state.

As of this morning, there is no updated text made public. I will share it as soon as I receive it. In the meantime, you can find links to the earlier proposals in my summary of the Senate bill here, and you can skim my recap of House bill here. If you want to see what the plans have in common – and what might make it into the final proposal – you can find it here.

The Senate will reconvene on Wednesday at noon and is expected to vote shortly after that. 

(Update: A compromise bill passed the Senate on 3/25/2020. You can read more here.)

Last week, Senate Republican leaders released their version of a stimulus package, dubbed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.” This week, House Democratic leaders proposed an alternative, “Take Responsibility for Workers and Families Act.”

Clearly, there is still work to be done. As of today (March 24), Congressional leaders say they’re working on a compromise. While they hash out those details, here’s a quick look at ten similarities between the two most talked about proposals:

1. Stimulus Checks. Both the House and Senate bills would provide immediate stimulus checks to taxpayers. Both versions would treat checks as variations on refundable tax credits. In both versions, checks would not be subject to reduction or offset.

  • The Senate bill would allow for checks of up to $1,200 per adult – or $2,400 for married couples filing jointly – as well as $500 per child. To qualify, taxpayers must typically be working or receiving Social Security or pension income since the amounts are tied to tax returns. Checks would begin to phaseout for those earning more than $75,000 ($150,000 for joint returns) and would disappear entirely for those earning more than $99,000. Those families at the bottom would receive no less than $600. 
  • Under the House proposal, checks would be up to $1,500 per adult, or $3,000 for married couples filing jointly, as well as $1,500 per child (up to three kids). Checks would also start to phaseout for those earning more than $75,000 ($150,000 for joint returns and surviving spouses), but there’s also an amount for a head of household: $112,500. 

2. Filing Deadlines For Individuals. Both the House and Senate bills would push off the federal income tax deadline for individual 2019 tax returns to July 15, 2020 – but that is moot since the filing deadline was officially extended on March 20, 2020. They would also extend the due date for estimated payments for 2020 to October 15, 2020.

3. Net Operating Losses. The Tax Cuts and Jobs Act provisions limiting net operating losses would be modified to allow for carry-backs. The years and amounts in play vary, but the ideas in both versions are similar.

4. COVID-19 Testing and Treatment. Both bills would require group health plans and health insurance issuers offering group or individual health insurance – including government plans – to cover preventive services for COVID-19, including no-cost testing. 

  • The House bill would also allow uninsured folks to get coverage through the exchanges and would provide subsidies for those eligible for COBRA.

5. Bailouts/Assistance. I know that it’s sort of cheating to include bailouts as a similarity since the specifics differ dramatically in the Senate and House bills. What they have in common: assistance to businesses, including the airline industry. Both versions also include some restrictions on companies who receive aid, including limiting payments to highly-compensated employees. 

  • The House version adds additional layers of restrictions, including limits on executive bonuses, bans on golden parachutes (excess compensation for executives with separation packages), stock buybacks (yes, again), dividend payments, and spending money on lobbyists.

6. Small Business Assistance. Both versions of the bill would expand the eligibility for small businesses to receive assistance, including loans. 

  • In the Senate version, loans could be used for payroll support, including paid sick, medical, or family leave, healthcare benefits, employee salaries, mortgage payments, rents, utilities, and other debts. Loans used to cover payroll could be forgiven if businesses retain employees through June 30, 2020. Funds used to pay tipped employees, such as bars and restaurants, may be eligible for loan forgiveness if they are used to provide additional wages.
  • In the House version, the bill would provide loans to qualifying small businesses, including independent contractors, at zero percent interest if the small business doesn’t terminate employees during the pandemic; forgiveness would be available for companies that meet specific hiring criteria. The bill would also extend protections for small businesses who owe debts.

7. Special Rules for Retirement Accounts. Both versions of the bill would allow for tax-favored “coronavirus-related” distributions/loans from individual retirement plans. 

  • The House proposal would also waive RMDs for 2020.

8. Paid Family and Sick Leave. Both versions would modify and expand existing paid leave bills, including the Family and Medical Leave Act and the spanking new Families First Coronavirus Response Act. In both cases, costs to employers would be offset by tax credits.

  • The House proposal is more comprehensive and would apply no matter the size of the employer. Employees who have been on the job for at least 30 calendar days would be entitled to take up to 12 weeks of job-protected leave to respond to the coronavirus. This would include self-quarantines and care for family members. Specifically, employees would be entitled to two full weeks of unpaid leave and then receive a reduced benefit. 

9. Student & Student Loans. Both versions would provide relief for student borrowers and those engaged in work-study programs. Both proposals would allow more flexibility for students who were unable to remain enrolled in school as a result of a qualifying emergency, including waivers and continuation of pay options for work-study.

  • The Senate bill provides that payments due for student loans shall be suspended – without interest – for three months.
  • The House bill would provide additional protections for those with private loans for a period of up to six months after the crisis ends. There is a cap ($10,000).

10. Support for Health Care Providers. The mechanics may differ, but both proposals would provide additional assistance, including increased funding for health care providers. Both plans would also create incentives and cut through red tape for telehealth services.

Whew. So not so different, right?

Of course, there are provisions that were included in one proposal and not the other. Some of those I find most interesting include:

1. Charitable Contribution Provisions. The Senate bill would provide that some individual charitable contributions be treated as above-the-line. That means that you would not have to itemize to claim those deductions – something that many taxpayers have grappled with because of the increased standard deduction under the Tax Cuts and Jobs Act (TCJA) that took effect in 2018. Additionally, the bill would also temporarily suspend the limits under section 170(b) and (d) on cash donations for individuals and modifies limits for charitable contributions from corporations. Restrictions apply (of course).

  • The House bill does not address those provisions.

2. Restrictions On Aid. The House bill would put restrictions on corporations that receive federal aid. This includes limits on executive bonuses, bans on golden parachutes (excess compensation for executives with separation packages), stock buybacks (yes, again), dividend payments, and spending money on lobbyists. The House bill also infamously included “green” provisions as criteria for airline bailouts. 

  • The Senate proposal did not impose many restrictions, and definitely not this specific. 

3. Voting. The House proposal included 60-some pages of voting legislation.

  • The Senate did not address voting in its proposal.

4. Funding. The House bill included hundreds of pages providing funding for various federal agencies to address the coronavirus response. To be fair, the bill did come out of the Appropriations Committee, so I guess we shouldn’t be too surprised…

  • The Senate did not include federal funding at the same levels or with the same detail. 

Remember: these are just proposals. And this just a quick look – you can find a deeper dive (with links to the text of the bills) in my summary of the Senate bill here, and you can skim my recap of House bill here.

Yes, there are differences. Loads and loads of differences. But there are also similarities. Hopefully, Congress can build on the shared bits and reach a compromise. Changes are coming, and I’ll keep you posted.

One more thing: this bill is in addition to H.R. 6201, Families First Coronavirus Response Act, which was signed into law on March 18, 2020. You can read more about the highlights of the bill in our prior coverage here. It’s also in addition to the $8.3 billion emergency health package, which was passed earlier this month. 

(Update: A version of the bill passed the Senate on 3/25/2020, and is expected to pass the House.)

Last week, the Senate introduced what I described as “a massive bill” intended to provide direct economic relief in response to the COVID-19 pandemic. That bill didn’t move forward over the weekend. The House responded with “hold my beer.” The Senate version of the bill was 247 pages long. But the House Democrats’ version? It’s 1,404 pages long. Not a typo. 1,404 pages long.

The House version has been dubbed the “Take Responsibility for Workers and Families Act.” You can read it here (downloads as a PDF). But since you probably won’t – and neither will many members of Congress – follows are some of the highlights (settle in):

Spending. The first two hundred pages (or so) provide funding for various government agencies, including the Food and Drug Administration and the Bureau of Prisons, for coronavirus programs. In addition to paying the Architect of the Capitol and salaries for Senate Employee Child Care Center, the bill would provide additional funding for the Internal Revenue Service (IRS) “to prevent, prepare for, and respond to coronavirus.”

Paid Family Leave. The bill amends (and expands) the Family and Medical Leave Act (FMLA). The bill would apply to private and public sector employees, no matter the size of the employer. Employees who have been on the job for at least 30 calendar days would be entitled to take up to 12 weeks of job-protected leave to respond to the coronavirus. This would include self-quarantines and care for family members. Specifically, employees would be entitled to two full weeks of unpaid leave, and then receive a reduced benefit. Costs to employers would be offset by tax credits.

Paid Sick Leave. The bill would also provide relief for sick employees, again, regardless of the size of the employer. Specifically, eligible full-time employees would be entitled to two weeks of emergency paid sick leave to take care of themselves or family members.

Medicaid, Medicare, and Private Insurance. The bill would provide additional resources for Medicaid and Medicare. Among other things, tests for COVID-19 would be at no cost to those on Medicaid, Medicare, and private insurance. A special enrollment period would allow uninsured folks to get coverage through the exchanges, and would provide subsidies for those eligible for COBRA.

Unemployment. About a third of the way through the bill (whew), the House tackles unemployment. The bill would provide an “emergency enhancement” or temporary unemployment compensation (UC) of $600 a week for workers eligible for state or federal UC benefits; this would be in addition to regular state or federal UC benefits. Some coverage would also be made available to self-employed individuals, with reduced benefits payable to those entering the workforce.

Housing. This bill would temporarily ban landlords from filing evictions on most renters and would provide financial assistance to renters. Homeowners would be protected, too, with a ban on foreclosures and repossessions, as well as mortgage forbearance, for some time after the pandemic ends.  

Debt Collection. Debt collectors would be barred from taking action, including suing in court, against consumers, small businesses, or non-profits for some time after the pandemic ends.

Student loans. Like the Senate bill, the House bill would also provide relief for student borrowers, including those with private loans. 

Small Business Loans & Debts. The bill would provide loans to qualifying small businesses, including independent contractors, at zero percent interest if the small business doesn’t terminate employees during the pandemic; forgiveness would be available for companies that meet specific hiring criteria. The bill would also extend protections for small businesses who owe debts.

Buybacks. On page 712 (!), we finally get to one of the provisions that reportedly stalled the original bill in the Senate: buybacks. Under this version of the bill, companies would be barred from making stock buybacks until the crisis has ended.

Restrictions on Aid. And on page 727 (!), the House includes language that was another sticking point. Under the proposal, corporations that receive federal aid under the bill would be subject to restrictions including limits on executive bonuses, bans on golden parachutes (excess compensation for executives with separation packages), stock buybacks (yes, again), dividend payments, and spending money on lobbyists.

Current Students. As in the Senate bill, the proposal would allow more flexibility for students who were unable to remain enrolled in school as a result of a qualifying emergency.

Voting. Much has been made of the voting provisions in the bill. The idea is to provide mechanisms for voting in federal elections during a state of emergency, public health emergency, or national emergency, including infectious disease. Considering that I’m trying to figure out how the self-quarantine will allow me to vote in my state primaries, I appreciate the idea. But did we need 60-some pages of voting legislation just now? The House felt that we did.

Federal employee protections. As expected, the proposal provides for federal employees, including telework opportunities and childcare reimbursement.

Aviation Industry Bailouts/Relief. Call it what you want, but the bill would offer relief for those in the airline industry, including airports and small community air service. Contrary to rumor, the bill does not extend similar assistance to the cruise industry (in fact, I believe the word “cruise” appears just once in the bill). On the consumer side, the bill would also prohibit price gouging and would require refunds during national emergencies. And yes, you’ve already seen the headlines, so you know there are environmental requirements which include mandating airlines who receive federal assistance to fully offset their carbon emissions starting in 2025.

Stimulus Checks. You and I both know why you’re really here, but the House makes you wait around for the goods. Stimulus checks don’t make an appearance until nearly 1,100 pages into the bill. Under the proposal, the government would provide an “economic assistance amount” to taxpayers. Checks would be more significant than in the Senate proposal, up to $1,500 per adult, or $3,000 for married couples filing jointly, as well as $1,500 per child (sorry, no more than three kids). That would make the base amount for immediate payments $7,500 for a family of five. Checks would start to phaseout for those earning more than $75,000 ($150,000 for joint returns and surviving spouses), but unlike the Senate proposal, there’s also an amount for a head of household: $112,500. Checks would be based on 2020 income even though we haven’t yet filed 2020 returns (it’s a head-scratcher). As with the Senate proposal, the check would be treated as an advance against a tax credit. Unlike the Senate proposal, you wouldn’t have to have earned income to get the checks: unemployed individuals still qualify. And as with the Senate bill, checks would not be subject to reduction, offset, or levy.

Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). The proposal would tweak the requirements for the EITC, allowing young adults who are not students with no qualifying children to claim the credit. It would also remove the earned income piece from CTC calculations and boost the value to $3,000 with a more substantial credit ($3,600) for children under the age of six. 

Net Operating Losses (NOL). Taxpayers and tax professionals can breathe a sigh of relief that NOL provisions made it into this proposal, too (NOLs are also addressed in the Senate proposal). This bill would allow businesses to carry back losses from 2018, 2019, and 2020 to the past five years. Restrictions would apply.

Payroll Tax Credit. Employers who hold onto employees during the pandemic would be eligible for a refundable payroll tax credit. The 80% credit would offset the employer’s share of Social Security taxes up to $10,000 per employee. Limitations apply, including limits on the number of employees (fewer than 1,500 employees) and a requirement that the employer demonstrate certain losses. 

Filing Deadlines. As with the Senate bill, the House bill would push off the filing deadline for individual 2019 tax returns to July 15, 2020 – again, moot since the filing deadline was officially extended on March 20, 2020. This bill would also extend the due date for estimated payments for 2020 to October 15, 2020. In other words, there would be no need to write separate checks for the skipped April and July estimated payment dates if the proposal passes.

Special Rules for Retirement Accounts. The bill would allow for tax-favored “coronavirus-related” distributions from individual retirement plans.

RMDs. I just wrote my Senators about this today (yes, really). I’ve received several emails from readers asking about temporary waivers of RMDs from retirement plans while markets are down. The House proposal would waive RMDs for 2020.

No Inclusion of Certain Over-The-Counter Medical Products As Qualified Medical Expenses. 1404 pages and nary a mention of menstrual care products. I only bring this up because I was perplexed (but I’m not gonna lie, not sorry) to see a provision in the Senate bill that would extend qualifying medical expenses treatment for menstrual products to MSAs, HSAs, HRAs and the like. That didn’t make it into the House bill. 

No Charitable Contributions Provisions. Also not in this version? Language to move some charitable contributions above-the-line, or suspend the limits on cash donations for individuals. Both were in the Senate bill.

Other Matters. The bill does, however, finish up with about 50 pages of “other matters.”

As before, keep in mind that this is just a proposal – and it’s my first read of the bill (so please don’t send angry emails). It’s long: did I mention that? And it’s super, super dense. I slogged through as best I could. And here’s my takeaway: This isn’t getting through the House and the Senate. So, take this summary with a grain of salt and please (please) don’t run out and spend that stimulus check that you don’t yet have in hand.

Remember, this bill is in addition to HR 6201, Families First Coronavirus Response Act, which already passed in the Senate. The President signed the bill into law on March 18, 2020.

It’s also in addition to the $8.3 billion emergency health package, passed earlier this month. 

Clearly, things are happening at a rapid-fire pace these days. Keep checking back for details.

The Senate has introduced a massive bill intended to provide direct economic relief in response to the COVID-19 pandemic. 

COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to the World Health Organization, as of March 20, 2020, there are 209,839 confirmed cases of COVID-19 in 168 territories and countries. According to Johns Hopkins, the United States has 14,250 confirmed cases with reported cases in every state.

As a result of the virus, state, local, and federal government officials have instituted varying degrees of voluntary and mandatory quarantines. The impact has been felt immediately by businesses.

In response, Congress has proposed several bills, including the most recent one introduced by Senate Republican leadership and dubbed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act.”  Here are some of the highlights:

Stimulus Checks. The bill would provide checks called “recovery rebates” to taxpayers. Unlike rebate checks in the past, which tended to be flat per taxpayer or family, the current bill would vary according to family income. The bill would allow for checks of up to $1,200 per adult – or $2,400 for married couples filing jointly – as well as $500 per child. All taxpayers must provide a Social Security number or adoption taxpayer identification number.

And here’s where things get tricky: taxpayers must typically be working or receiving Social Security or pension income to qualify since the amounts are tied to tax returns. The amount of the checks would start to phaseout for those earning more than $75,000 ($150,000 for joint returns) and would disappear entirely for those earning more than $99,000. Those families at the bottom – those with no federal income tax liability – would receive less money, but no less than $600. Checks would be paid out “as rapidly as possible.”

And since I know many folks have asked: under the bill as written, checks would not be subject to reduction or offset.

Filing Deadlines. The bill would push off the filing (yes, FILING) deadline for individual 2019 tax returns to July 15, 2020 – but that is moot since the filing deadline was officially extended on March 20, 2020. However, the bill would also extend the due date for estimated payments for 2020 to October 15, 2020, and would treat ALL estimated payments due through October 15, 2020, as “one installment due on such date.” In other words, there would be no need to write separate checks for the skipped April and July estimated payment dates if the proposal passes.

Small Business Interruption Loans. The bill would expand the eligibility for certain small businesses (those under 500 employees) to receive a loan of up to $10 million under the Small Business Act. Loans could be used for payroll support, including paid sick, medical, or family leave, and costs related to the continuation of group health care benefits; employee salaries; mortgage payments and rent; utilities; and other debts. Loans used to cover payroll could be forgiven if businesses retain employees through June 30, 2020. Funds used to pay tipped employees, such as bars and restaurants, may be eligible for loan forgiveness if they are used to provide additional wages.

Special Rules for Retirement Accounts. The bill would allow for tax-favored “coronavirus-related” distributions from certain retirement plans of up to $100,000. Qualifying taxpayers would also be allowed to repay their retirement plans to make up for money withdrawn to pay coronavirus-related expenses (including loans and distributions).

Charitable Contributions Move Above The Line. In what I think might be a first, the bill would provide that certain charitable contributions be treated as above-the-line. That means that you would not have to itemize to claim those deductions – something that many taxpayers have grappled with because of the increased standard deduction under the Tax Cuts and Jobs Act (TCJA) that took effect in 2018. Under the provisions in the bill, the benefit couldn’t exceed $300 and wouldn’t apply to donor-advised funds.

Charitable Contribution Limits. The bill would also temporarily suspend the limits under section 170(b) and (d) on cash donations for individuals and modifies limits for charitable contributions from corporations. Restrictions apply (of course).

Corporate Tax Payment Delays. Corporations get extra time to file and pay, too. The bill would extend the time to pay estimated payments (same treatment as individuals) and payroll taxes through October 15, 2020. And yes, the extension for payroll tax would apply to the employer portion of self-employment taxes, too.

Net Operating Losses. Taxpayers and tax professionals weren’t big fans of the TCJA provision limiting net operating losses. Those provisions would be modified under the bill, allowing for carry-forwards and carry-backs (!) to 2018. Lots (and lots) of limitations and restrictions would apply.

Bailouts. The bill includes up to $208,000,000,0000 for loans and loan guarantees to severely distressed sectors of the economy. Those sectors include passenger and cargo air carriers and “other eligible businesses.” Limits apply, including restrictions on paying certain highly-compensated employees. 

Aviation Excise Taxes. Travelers could get a break, too. The bill would suspend certain federal aviation excise taxes through the end of the year. You may not write a separate check for those taxes, but you do pay them – just check your tickets.

COVID-19 Testing and Treatment. With costs for testing and treatment still a concern, the bill would require group health plans and health insurance issuers offering group or individual health insurance to cover preventive services for the virus. It would also require diagnostic test providers for COVID-19 to make the cash price for the test available to the public on the internet.

Inclusion of Certain Over-The-Counter Medical Products As Qualified Medical Expenses. As a woman, I cheer this provision, but as a tax professional, I’m perplexed by the timing. The bill would consider amounts paid for menstrual care products as paid for medical care. That would include “a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.” You already know how I feel about this, I’m sure (you can read my tampon-hoarding piece here), because we are certainly not buying menstrual products for kicks – it’s a medical thing – but the inclusion in *this* bill is odd. But, here we are, so I’m not complaining. The bill would extend the qualifying medical expenses treatment for menstrual products to Archer Medical Savings Accounts, Health Flexible Spending Arrangements, Health Reimbursement Arrangement – your basic healthcare alphabet soup: MSAs, HSAs, HRAs and the like.

Current Students. I know many of you scrolled down just to read this bit (do yourself a favor and scroll back up, just in case), but several provisions in the bill apply to student loans. And honestly, they’re the most complicated (yes, more than airline bailout provisions). But here’s the gist. First, colleges and universities are allowed to award “emergency financial aid grants” without regard to the usual need calculation; the amount of the grant can’t exceed the applicable Pell grant for the same year. The bill would also allow some payments to be made to students with work-study arrangements if they weren’t able to finish their work during the year because of the virus (including virus-related closings).

The bill also allows the Department of Education to exclude some loans for students who were unable to remain enrolled in school as a result of a qualifying emergency (exceptions apply). Waivers also apply to Pell Grant repayments under the same circumstances. The details will probably have to be finessed, but this is clearly intended for students who were forced to withdraw and did not receive credit for attendance but paid unreimbursed tuition and expenses with loans.

Suspension Of Student Loans. The bill also provides that payments due for student loans shall be suspended – without interest – for three months.

Corrections and Modifications. The bill also offers revisions and modifications to existing paid leave bills, including the Family and Medical Leave Act and the spanking new Families First Coronavirus Response Act.

WAIT! Before you run out and share, keep in mind that this is just a bill – and it’s my first read of the bill. It’s long and dense. Senate Finance Committee Chair Charles Grassley (R-IA) said, “These recommendations take bold steps to curb the economic fallout as we work as a country to contain this pandemic. These recommendations won’t be the end of the congressional response to the coronavirus.”

But some in Congress worry that the bill offers a lot, but is not focused on assisting those who need it most. Even Republicans voiced skepticism about the McConnell-introduced plan. Two Senators, in particular, suggested that the timing is off. Sen. Lindsay Graham (R-SC) isn’t yet on board, saying that the checks won’t do much to help at this point; Sen. Richard C. Shelby (R-Ala.) reportedly agrees.

You can read the latest version of the bill here – but settle in – it’s 247 pages long. 

This bill is in addition to H.R. 6201, Families First Coronavirus Response Act, which cleared the House last week and passed in the Senate this week. It guarantees free testing or health care coverage for coronavirus testing, and provides paid sick leave for some workers and offers additional funding for seniors, food assistance, and unemployment benefits. The President signed the bill into law on Wednesday, March 18, 2020.

It’s also in addition to the $8.3 billion emergency health package, which was passed earlier this month. This most recent bill focuses explicitly on economic aid for workers.

Clearly, things are happening at a rapid-fire pace these days. Keep checking back for details.

(Author’s Note: Updated to reflect that the President signed the bill into law.)

The Senate has passed the House’s bill intended to provide economic relief in response to the COVID-19 pandemic. The original bill, H.R. 6201, Families First Coronavirus Response Act, cleared the House last week.

COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to the World Health Organization, as of March 18, 2020, there are 193,029 confirmed cases of COVID-19 in 164 territories and countries. According to Johns Hopkins, the United States has 7,324 confirmed cases with reported cases in every state.

As a result of the virus, state, local, and federal government officials have instituted varying degrees of voluntary and mandatory quarantines. The impact has been felt immediately by some businesses, including those who depend on in-person customer interaction.

After initially suggesting that the bill was flawed, Sen. Majority Leader Mitch McConnell got behind it, saying, “This is a time for urgent bipartisan action, and in this case, I do not believe we should let perfection be the enemy of something that will help even a subset of workers.”

The bill passed with a vote of 90-8 (and two abstentions). You can see how your Senator voted here.

Before the vote, three amendments to the bill failed. The most notable was a sound 95-3 no vote on a motion by Sen. Rand Paul (R-KY) intended to “amend the Internal Revenue Code of 1986 to require a social security number for purposes of the child tax credit, to provide the President the authority to transfer funds as necessary, and to terminate United States military operations and reconstruction activities in Afghanistan.” You can see how your Senator voted on the Paul amendment here (spoiler Alert: only Braun (R-IN), Lee (R-UT), and Paul (R-KY) voted yes).

The President signed the bill into law on Wednesday, March 18, 2020. He had previously endorsed it on Twitter, tweeting:

The bill guarantees free testing or health care coverage for coronavirus testing. It also provides paid sick leave for some workers and offers additional funding for seniors, food assistance, and unemployment benefits.

The bill does not affect tax season filing deadlines. Payment deadlines have been extended, and on March 20, 2020, Treasury Secretary Mnuchin announced that the tax filing deadline has been extended to July 15, 2020.

The bill also does not include any payroll tax relief. Payroll tax relief has been shelved in exchange for immediate stimulus payments with the President confirming during a Wednesday White House briefing that checks are likely with the amount “to be determined.” It’s been suggested that there would be two checks to be released, with one in April and again in May. McConnell has promised that the Senate won’t recess until those details are hammered out.

This bill – and any future stimulus relief – is in addition to the $8.3 billion emergency health package, which was passed earlier this month. This most recent bill specifically focuses on economic aid for workers.

More economic relief is on the way. That was the word out of the White House briefing today regarding the COVID-19 pandemic.

COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. According to the World Health Organization, as of March 18, 2020, there are 193,029 confirmed cases of COVID-19 in 164 territories and countries. According to Johns Hopkins, the United States has 7,324 confirmed cases with reported cases in every state.

As a result of the virus, state, local, and federal government officials have instituted varying degrees of voluntary and mandatory quarantines. The impact has been felt immediately by some businesses, including those who depend on in-person customer interaction. 

There wasn’t a lot of targeted discussion about financial relief in the most recent briefing, but when questioned about the economic stimulus checks, the President confirmed that those are likely. The amount, however, is “to be determined.” Similarly, the frequency and timing of the checks have not yet been confirmed although it’s been suggested that there would be two checks to be released, with one in April and again in May. As noted earlier, Treasury expects that the amounts would be based on income level and family size.

Additionally, the President announced additional coronavirus relief, including the suspension of foreclosures and evictions from Housing and Urban Development (HUD). Specifically, HUD will be suspending foreclosures and evictions for mortgages insured by the Federal Housing Administration through the end of April. Also, the Federal Housing Finance Agency (FHFA) has ordered lenders Fannie Mae and Freddie Mac to take similar steps.

The President also said that additional relief for the private sector was on the way, noting that “we want to keep those companies vibrant.”

Treasury Secretary Steven Mnuchin warned Senators yesterday that the unemployment rate could hit 20%. When questioned about those comments today, Trump said that he did not expect those levels, calling it “an absolute worst-case scenario.”

Also, yesterday Mnuchin announced some changes to the tax filing season. During the White House briefing on March 17, Mnuchin explained that the IRS would allow taxpayers to defer some payments.

“If you owe a payment to the IRS, you can defer up to $1 million as an individual — and the reason why we are doing $1 million is because that covers lots of pass-throughs and small businesses — and $10 million to corporations, interest-free and penalty-free for 90 days. All you have to do is file your taxes, you’ll automatically not get charged interest and penalties,” Mnuchin said.

The IRS issued official guidance on the penalty and interest provisions and then updated the guidance subsequently.

As part of the response to the virus, the House also passed H.R. 6201, Families First Coronavirus Response Act. While the President has voiced support for the bill, the Senate has not yet voted. However, Senate Majority Leader Mitch McConnell (R-KY) called the bill “well-intentioned” and has promised action.