On Monday, December 21, Congress passed comprehensive year-end legislation that includes targeted, short-term COVID-19 relief, full-year appropriations to fund the Federal Government through September 31, 2021, and a series of tax and healthcare provisions.
The legislation includes a number of provisions of critical importance to Federations and partner agencies, including:
$284 billion for a new round of PPP loans and other provisions to support nonprofits and small businesses.
The bill has three key provisions for nonprofit entities: (1) Paycheck Protection Program forgivable loan continuation, including a second round for qualified borrowers; (2) Employee Retention Tax Credit provisions extended and expanded and made available to qualified PPP borrowers; and (3) extension through mid-March 2021 of the current 50% reimbursement to nonprofit organizations that self-insure their state unemployment insurance compensation payments.
Paycheck Protection Program: The bill provides $284 billion for the Paycheck Protection Program (PPP), extends the program through March 31, 2021, and provides for a second draw for qualified entities. The Small Business Administration (SBA) has 10 days after the date of the bill’s enactment to issue regulations carrying out these amendments.
Categories of covered expenses for purposes of forgiveness are increased to include worker protection, remediation, property damage, and certain operational expenses.
Second PPP Loan: Nonprofits and businesses that have or will use the full amount of a first PPP loan may be eligible to receive a second loan of up to $2 million. Eligibility borrowers must meet the following qualifications:
Simplified Forgiveness: The legislation includes a simplified forgiveness process for borrowers of both the first and second PPP loans of $150,000 and below. Borrowers will only need to submit a simple one-page forgiveness application and no supporting documentation.
Economic Injury Disaster Loans (EIDL): $20 billion for targeted EIDL Advance grants for eligible entities located in low-income communities and removes requirement to deduct EIDL Advances from the PPP forgiveness amounts. This targeted program is available to entities that have suffered an economic loss greater than 30 percent and have less than 300 employees. The bill provides that that eligible small businesses and nonprofits in low-income communities are eligible to receive $10,000 grants, including those that received a first round of awards that were less than the full amount and repeals the provision that requires PPP borrowers to deduct EIDL advances from their PPP forgiveness amount.
Shuttered Venue Operators: The bill includes $15 billion for SBA grants to live venue operators, theatrical producers, live performing arts organization operators, museum operators, and motion picture theatre operators that have experienced a 25% reduction in revenues. It includes a set-aside for those with less than 50 full-time employees. Grant proceeds are to be used for payroll costs, rents, utilities, and PPE.
Employee Retention Tax Credit (ERTC): The bill extends and expands the refundable Employee Retention Tax Credit (ERTC), which was part of the CARES Act. The extension of this tax credit through July 1, 2021 will help keep additional U.S. workers on payroll and more small businesses and nonprofits across the country afloat. Key changes in the ERTC provision:
Self-Insured State Unemployment Insurance Compensation Payments: The bill extends through March 14, 2021, a provision in the CARES Act that provides reimbursement of 50% of the cost for nonprofits that self-insure their state unemployment insurance compensation costs.
The Fiscal Year 2021 appropriations include three key programs for the Jewish community:
100% increase for nonprofit security funding, care for Holocaust survivors, and other appropriations.
Nonprofit Security Grant: The bill provides $180 million, split evenly between the NSGP-Urban Area Initiative and NSGP-State initiative. This constitutes a 100% increase over prior year funding. This program funds physical security and related preparedness planning and training grants to nonprofit organizations deemed at-risk of potential attack from foreign or domestic terrorists or violent extremists.
Care for Holocaust Survivors: $5 million is provided, representing the seventh consecutive year of funding for the Holocaust Survivor Assistance Program. This program advances the development, dissemination, and delivery of person-centered, trauma-informed care for Holocaust survivors and other older populations with a history of trauma, their families, and service providers.
Emergency Food and Shelter Assistance: $130 million is provided, representing the second consecutive increase in program funding, up from $120 million in FY 2019. This program supplements community-based organizations that provide emergency food and shelter support to families and individuals who are facing economic emergencies and are food and shelter insecure.
Stimulus checks and an extension of (and increase in) unemployment benefits.
The legislation includes up to $600 in stimulus for each adult who had earned less than $75,000 in adjusted gross income (AGI) in 2019 (or $1,200 per couple filing jointly with AGI under $150,000), as well as $600 for each child dependent, with the amount decreasing per individual single tax filer with an AGI above $75,000 and disappearing altogether for those who earned more than $99,000.
Congress also extended to 24 weeks federal Unemployment Insurance (UI) benefits for those who had exhausted their state benefits, and added up to $300 per week to those receiving UI through March 14, 2021.
The Pandemic Emergency Unemployment program, which pays benefits to self-employed workers and contractors, was also extended, with up to $100 per week available for some of those receiving the self-employed unemployment payments.
Extension and expansion of important tax provisions including charitable contribution deductions.
Charitable Giving Incentives: The bill includes a one-year extension of the $300 above-the-line (or “universal”) charitable contribution deduction included in the CARES Act for 2020 only. It also increases from $300 to $600 the amount for 2021 that married couples filing jointly can deduct for charitable contributions. Additionally, the bill extends through the end of 2021 the increased limits on deductible charitable contributions for individuals and businesses. This will permit individuals to deduct up to 100% of their adjusted gross income if they make cash contributions to qualified charities (other than donor-advised funds and supporting organizations).
Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) “Lookback” Rule: The bill includes a special temporary rule that allows lower-income individuals to use their earned income from tax year 2019 to determine the refundable EITC and the refundable portion of the CTC (i.e., the Additional Child Tax Credit) in the 2020 tax year. This will help workers who experienced lower wages this year due to the pandemic get a larger refund that is consistent with their earnings from prior filing seasons.
Paid Leave Credits: The bill extends through March 31, 2021 the refundable payroll tax credits for paid sick and family leave that were established in the Families First Coronavirus Response Act. The bill also allows self-employed individuals to use their average daily self-employment income from 2019, rather than 2020, for computing these credits.
Flexible Spending Arrangements (FSA): The legislation provides relief for individuals with health and dependent care FSAs to carry over any unused health and dependent care FSA benefits from 2020 into the 2021 plan year, along with other FSA plan flexibilities.
Itemized Deduction for Medical Expenses: The floor for the medical expense itemized deduction is made permanent at 7.5% of adjusted gross income.
Other Expiring Tax Provisions: The bill also extends several tax provisions for five years including the Work Opportunity Tax Credit, the New Markets Tax Credit, the Opportunity Zone tax provisions, and the employer credit for paid family and medical leave.
A number of anti-poverty and healthcare measures that support Jewish agencies’ services.
Food Insecurity provisions include the following changes:
Supplemental Nutrition Assistance Program (SNAP): Increases SNAP maximum benefit by 15% through June 30, 2021, to address food insecurity. Also includes $5 million for technical support to the USDA in expanding the SNAP online purchasing program, which has significantly aided isolated older adults and individuals with disabilities who are not able to do in-person shopping. An additional $400 million is allocated to support the Emergency Food Assistance Program (TEFAP) to fund food banks.
Pandemic-EBT: Improves the Pandemic-EBT program to cover costs of meals for children who would have otherwise received free school lunches.
Senior Nutrition: The bill provides $175 million for emergency senior nutrition programs and continues flexibility for transfers of funding between congregate and home-delivered meal programs. It also allows older adults to be eligible for home-delivered meal programs.
Administration for Community Living programs focusing on aging and disabilities received a total of $2.285 billion, a $35 million increase from FY 2020.
Housing program increases are as follows: Section 202 Housing for the Elderly program – $855 million, a $57 million increase; Section 811 program for People with Disabilities – $227 million, a $25 million increase; HHS’ Low Income Home Energy Assistance Program (LIHEAP) – $3.75 billion, a $10 million increase.
Childcare funding increases include:
Emergency Relief for Day Schools: The bill provides $4.05 billion to private K-12 schools, with priority for schools that serve low-income students and are significantly impacted by the emergency. Permissible expenditures include cleaning supplies, PPE, ventilation, COVID testing, staff safety training, and educational technology for remote or hybrid learning.
Vaccines, Testing and Tracing: The bill provides essential funding for vaccine procurement and distribution, with $300 million specifically directed to distribution efforts in high-risk and underserved areas, including communities of color. More than $22 billion is designated to states for testing, tracing, and COVID mitigation programs. Of this total, $2.5 billion is allocated for grants targeted at needs in underserved areas, including both communities of color and rural communities.
Medicaid and Medicare Extenders: The bill provides three-year extensions through FY 2023 for key Medicaid and Medicare programs that JFNA has championed in recent years, including Medicaid’s Money Follows the Person Demonstration, Medicaid’s Spousal Impoverishment Protection for Home- and Community-Based Services, and Medicare’s Independence at Home Program. These programs promote greater independence and improved care for older adults and people with disabilities by helping them live in their own homes or communities with appropriate services and support.
Similarly, the bill delays the cuts to disproportionate share payments for safety net hospitals that treat large numbers of uninsured patients and extends the certified behavioral health center program by three years. The bill also codifies Medicaid coverage for non-emergency medical transportation to and from providers, which helps people with disabilities access needed health and social services.
Expansion of Telehealth for Mental Health Services: The bill authorizes limited permanent expansion of telehealth for Medicare-covered mental health services following the end of the public health emergency. Specifically, the bill allows mental health services delivered through telehealth to be provided to Medicare beneficiaries at home, but requires that the provider must have treated the patient in person within six months of the first telehealth service. The bill does not address Medicare coverage of audio-only telehealth services. The current temporary expansion of Medicare-covered telehealth is expected to continue for the duration of the public health emergency.
Additional Funding for Provider Relief: The bill appropriates an additional $3 billion more to the Provider Relief Fund for a broad range of healthcare providers, including Medicare and Medicaid providers and other providers as well. The measure sets forth specific distribution requirements, including that funding will be made available on a rolling basis. Many of JFNA’s partner hospitals, family service agencies, nursing homes, and home- and community-based services providers have received distributions from the Provider Relief Fund to help offset significant revenue losses and increased expenses.
Additional Appropriations for Broadband and FCC COVID-19 Telehealth Program: The bill provides nearly $250 million more for the existing COVID-19 Telehealth Program, which reimburses selected healthcare providers for telehealth-related expenses incurred during the current crisis. A small number of Jewish hospitals, nursing homes and family service agencies received funds under the FCC’s initial distributions from this program.
Mitigating Medicare Provider Reimbursement Cuts: The bill includes a suite of measures to stave off planned cuts to Medicare providers’ reimbursement and injects $3 billion into the Medicare Physician Fee Schedule in 2021, resulting in payment increases across the board to help Medicare providers during the ongoing COVID-19 pandemic.
Mental Health Parity: The bill includes measures to promote improved mental health parity compliance and enforcement.
Additional Appropriations for Mental Health: The bill appropriates $4.25 billion for mental health and substance use programs, including funding to support crisis response.
Surprise Medical Billing: The bill provides an end to surprise medical billing, providing patients with important new consumer protections.
Other important provisions.
Coronavirus Relief Fund: The CARES Act provided states and local governments with up to $150 billion to cover expenses related to the pandemic that were not accounted for in previous government budgets. Some states and local governments have not yet spent all their allotted relief funds, and the bill extends the availability for such funds by one year (until Dec. 31, 2021). These funds have been an important source of funding for a number of Jewish organizations through grant programs or other forms of direct assistance to nonprofit entities.
The Nita M. Lowey Middle East Partnership for Peace Act of 2020, a bill JFNA has long supported that authorizes funding for joint economic development and civil society projects between Israeli, Palestinian, and U.S. entrepreneurs, was included in the Omnibus bill. This bill will authorize $50 million for five fiscal years to establish the People-to-People Partnership for Peace Fund and the Joint Investment for Peace Initiative.
Firearm injury and mortality prevention research is funded at $12.5 million (same as in FY 2020).