March 23, 2020
By Brian Johnson, The Vogel Group
We have obtained the House Democrats’ version of the COVID-19 Phase III response. Most notably, the tax title is significantly different (click here for the full text). Here are some highlights from a quick read and public sources:
- Payroll tax credit for hospitals that provide COVID-19 non-profit / charity / donated care; the credit amount is 90% of the value of the care that was donated.
- Additional credits for hospitals, essentially full and immediate expensing for hospital structures that had to be built / adapted to treat COVID-19.
- Premium tax credits for health insurance adjusted and changes to affordability rules for health insurance premiums are modified as well.
- Personal tax credits $1,500 per person including $1,500 per child (same phase outs as Senate bill, but higher dollar amounts).
- Head of household 75k / 150k phase outs.
- Money is taxed, but you can spread liability over 3 years.
- ETIC changes, max age increased to 66, credits are doubled and phase outs adjusted (EITC is also expanded to Puerto Rico).
- Child tax credit is now 100% refundable under this bill.
- Employer provided dependent care is expanded to exclude from taxes up to $10,500
- NOL carry back for 5 years and the 80% cap is lifted
- Creation of a new payroll credit for 80% of qualified wages for business shut down by COVID-19. Up to $10,000 for qualified wages per employee limited at this per quarter. Only applies to businesses with fewer than 1500 FTE or $41.5M in gross receipts.
It will be officially introduced at 2:00 pm Eastern Time today, but the political reality is this bill is filled with other largely Democrat priorities, major changes to union collective bargaining, and other rules that are so politically toxic that the Republican Senate will not adopt this.
This illustrates just how far apart these two chambers are. There will be much more negotiating behind the scenes before an agreement is reached.
About the Author:
A principal at The Vogel Group, Mr. Johnson provides clients with a comprehensive strategy to tackle Capitol Hill, the Administration and agencies. He is instrumental as a senior leader of the firm’s government affairs practice and averages over 500 Congressional meetings a year and countless pieces of legislation introduced on behalf of clients. As a policy expert he has testified before Congress and his expert commentary has been featured on BBC, CNN, C-SPAN, Fox News, Fox Business News, PBS, and many more. He can be reached at firstname.lastname@example.org.