President Trump Signs Coronavirus Response Package That Includes Murphy-Led Employee Retention Tax Credit

Murphy’s last-minute addition to legislation will support small businesses, help reduce employee layoffs around the nation

WASHINGTON—Today, the U.S. House of Representatives passed and President Trump signed a bipartisan bill strongly supported by U.S. Rep. Stephanie Murphy of Winter Park, Fla., to combat the public health and economic crisis caused by COVID-19. Included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act is a pro-worker, pro-business measure spearheaded by Murphy to support small businesses and help reduce employee layoffs around the nation. According to the latest estimates, the measure will provide roughly $55 billion in support to businesses who pay their employees rather than lay them off. For nearly a month, Murphy has been pushing her proposal, the Employee Retention Tax Credit, to be part of any package passed by Congress to support American families and businesses.

“This bipartisan package provides a strong response to the unprecedented public health and economic crisis posed by COVID-19. American families and small business owners struggling as a result of this pandemic need immediate assistance to overcome this crisis, and this bill provides them with the direct financial support to put food on the table and keep their businesses afloat,” said Murphy. “I am proud the bill includes my employee retention tax credit, which will help businesses—specially small businesses—pay and retain their employees during this public health crisis. I’ll never stop fighting for central Florida families, and my staff and I are working around the clock to help see central Florida through these trying times.”

Some of the provisions in the CARES Act include:

  • Direct Payments to Working Americans: the bill includes direct cash payments of $1,200 for each adult. An additional $500 cash payment is available per child under the age of 17. The full payment is available for individuals making up to $75,000 (individual) and $150,000 (married). The amount begins to phase out for individuals earning more than those amounts.
  • Unemployment Insurance ($260 billion) the bill includes a massive investment in the UI program as well as critical reforms to make the program more effective for workers. In the wake of the economic recession caused by the coronavirus the UI program is an essential long-term lifeline for millions of laid-off workers during this crisis. It provides full paycheck replacement in the form of a $600 increase for every American, which equates to 100 percent of wages for the average American without a paycheck struggling through the crisis. It gets money in people’s pockets sooner by providing federal incentives for states to eliminate waiting weeks, and ensures an additional 13 weeks of federally-funded unemployment insurance benefits are immediately made available. Finally, it allows part-time, self-employed, and gig economy workers to access UI benefits.
  • Marshall Plan For Health Care System ($150 billion): the bill makes a historic investment in our health care system to help in its fight against the COVID-19 pandemic. The new $150 billion fund is widely available to all types of hospitals and providers most affected by COVID-19, and it will be available to fund whatever is needed to defeat this virus. This includes personal and protective equipment for health care workers, testing supplies, increased workforce and training, new construction to house patients, emergency operation centers and more. Additional funding is also dedicated to delivering Medicare payment increases to all hospitals and providers to ensure that they receive the funding they need during this crisis, and new investments in our country’s Strategic National Stockpile, surge capacity and medical research into COVID-19.
  • Small Business Rescue Plan ($377 billion): $350 billion in loan forgiveness grants to small businesses and non-profits to maintain existing workforce and help pay for other expenses like rent, mortgage, and utilities; $10 billion for SBA emergency grants of up to $10,000 to provide immediate relief for small business operating costs; $17 billion for SBA to cover 6 months of payments for small businesses with existing SBA loans.
  • State and Local Coronavirus Expenditures Fund ($150 billion): To assist states and local governments that must pay for new expenses related to COVID-19 response, the bill provides $150 billion.

The key provisions of the Murphy-backed ERTC (Section 2301 of the CARES Act) are as follows:

  • The credit is equal to 50 percent of qualified wages (including health expenses) paid to an employee after March 12, 2020 in each calendar quarter, up to a total of $10,000 in qualified wages per employee for all quarters.
  • The credit is taken against employment taxes, with any excess refunded to the employer.
  • For employers with 100 or fewer employees (measured by average employment in 2019), the credit applies if the employer had to fully or partially suspend operations due to an order from a governmental authority, or had a decline in revenue for any calendar quarter in 2020 of 50% compared to the same quarter in 2019.
  • For employers with over 100 employees, the same conditions apply but the credit applies only to wages paid to employees who are on payroll but not working.
  • The credit covers qualified wages paid after March 12, 2020 to December 31, 2020. The credit expires when (1) the full $10,000 per employee maximum is reached, or (2) when revenue for a quarter in 2020 is above 80% of gross receipts for the same quarter in 2019.
  • The credit applies to tax-exempt organizations, including non-profit organizations.

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