End-of-Year Deadlines For Congress
Many economic relief provisions from the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other COVID-related bills expire at the end of December. Several non-COVID provisions are also set to expire, most notably the continuing resolution that provides discretionary funding through December 11. Congress will have to enact 12 individual appropriations bills – or possibly one large omnibus bill – otherwise, the government will shutdown.
There are about two dozen relief provisions that will expire at the end of the year. Notable deadlines include the end of several unemployment provisions for the self-employed and those who have been unemployed longer than six months, paid sick leave, and several tax breaks and deferrals. States must also spend or lose remaining funds given to them as part of the Coronavirus Relief Fund in the CARES Act.
Aside from COVID response provisions, there are roughly 30 tax extenders set to expire at the end of the year, including several provisions from the 2017 Tax Cuts and Jobs Act. In addition, certain programs and policies that are subject to regular renewal – such as Temporary Assistance for Needy Families and health policy extenders under Medicare and Medicaid – will expire in December.
COVID Relief Provisions (expiring December 31 unless otherwise noted)
| Expiring Provision | More Information |
|---|---|
| Pandemic Unemployment Assistance (PUA) | PUA expands unemployment benefit eligibility to the self-employed, gig workers, those with short work histories, and other groups (expires December 26 in most states). |
| Pandemic Emergency Unemployment Compensation (PEUC) | PEUC extends the normal period for receiving unemployment benefits (26 weeks in most states) by an additional 13 weeks (expires December 26 in most states). |
| Other unemployment programs | Increased federal funding for Extended Benefits, short-time compensation programs, the first week of benefits, and cost-sharing for self-insuring nonprofits, governments, and tribes. The waiver of personnel rules allowing states to make temporary hires to process claims also expires. |
| Unspent Coronavirus Relief Funds | Any remaining portion of the $150 billion fund given to states, local governments, tribes, and territories must be returned if not spent by December 30. |
| Paycheck Protection Program (PPP) forgiveness period | While new PPP loans stopped being issued in early August, existing loans can be used to cover expenses from any 8- or 24-week period between when the loan was received and December 31. |
| Looser caps on interest deductibility | The CARES Act temporarily reversed a portion of the TCJA by increasing the business interest deduction limit from 30 percent to 50 percent of taxable income. The change applied to tax years 2019 and 2020. |
| Looser caps on net operating losses | The CARES Act temporarily reversed a portion of the TCJA by suspending the taxable income limitation on Net Operating Losses (NOLs) and allowing businesses to carry NOLs back five years. The change applied to tax years 2018, 2019, and 2020. |
| Broader use of pass-through losses | The CARES Act temporarily reversed a portion of the TCJA by allowing taxpayers making over $250,000 (single)/$500,000 (joint) to use their business losses to reduce their non-business income. The CARES Act reversed this restriction for tax years 2018, 2019, and 2020. |
| Employee retention credit | Allows affected employers to receive a refundable payroll tax credit of 50 percent for up to $10,000 of wages per employee. |
| Employer-side payroll tax deferral | The CARES Act allowed employers to defer paying the employer portion of Social Security taxes through 2020. Half of deferred taxes must be repaid by the end of 2021, and the remaining half by the end of 2022. |
| Employee-side payroll tax deferral | An August executive order allowed employers to defer paying the employee portion of Social Security taxes for September through December, with the amount to be repaid between January and April 2021. |
| Families First Act sick & family leave | Small employers and governments are required to offer two weeks of paid sick leave and an additional 10 weeks of paid family and medical leave for employees who are unable to work due to COVID. Private sector employers are reimbursed via payroll tax credits. |
| Early retirement account withdrawals | The 10 percent tax penalty for an early distribution of up to $100,000 from an IRA or defined contribution plan such as a 401(k) is waived through December 31. |
| Waived minimum distribution rules | The CARES Act waived the requirement for individuals to take minimum distributions from their IRAs and defined contribution plans. |
| Increased charitable deductions | The CARES Act temporarily increased the amount of charitable contributions that can be deducted to 100 percent of income (up from 60 percent) for individuals and 25 percent (up from 15 percent) for food contributions by corporations. |
| Above-the-line charitable deduction | The CARES Act created a temporary above-the-line charitable deduction of up to $300 for donations made in 2020. |
| Employer-paid student loan exclusion | The CARES Act expanded the provision that allows employees to exclude from income amounts paid for employer-sponsored educational assistance programs. For 2020, payments that an employer makes towards student loan debt also qualify. |
| Excise tax exclusion for alcohol used to make hand sanitizer | The CARES Act exempted distillers from paying liquor excise taxes on alcohol used to make hand sanitizer. |
| Medicare sequester freeze | The CARES Act cancelled the Medicare sequester between May and December 2020. |
| Unspent Election Assistance funds | Any remaining portion of the $400 million in election assistance given to states and territories must be returned. |
| Airport layoff freeze | As a condition of receiving grant funds, airports were required to continue employing least 90 percent of their workforce through December. |
| Federal Reserve lending facilities | The Treasury Department will no longer be authorized to make new investments in the Federal Reserve’s CARES Act-funded facilities. According to a December 17 CRS report, the Federal Reserve could likely continue to make loans with existing funding. if the Treasury Secretary agreed. |
| Treasury direct loans for airlines and national security | The CARES Act authorized $25 billion for passenger air and related services, $4 billion for cargo airlines, and $17 billion for “firms vital to national security.” Only one loan has been issued in each of the last two categories. New loans cannot be issued after December. |
| Aviation tax suspension | Several aviation taxes paid by passengers (on the fare) and air carriers (on fuel and cargo) have been suspended through the end of the year. |
| Economic Impact Payment checks | Treasury cannot send any standalone stimulus checks after December. However, any unclaimed amounts (or increased amounts based on a change of 2020 circumstances) can be claimed in 2021 when filing a 2020 tax return. |
| Student loan deferral and 0% interest rate | An August executive order allowed student loan borrowers to continue deferring student loan payments and continued to set student loan interest rates at zero percent. This was an extension of a provision in the CARES Act and a March executive order. Update: On December 4, Education Secretary Betsy DeVos extended the forbearance and zero interest period from December 31 to January 31. |
| Eviction moratorium | The Centers for Disease Control imposed a moratorium on all evictions from residential properties, which expires at the end of the year. The moratorium does not change rules about payment of rent or charging of late fees. |
| FHA-insured homes eviction and foreclosure moratorium | The Federal Housing Administration (FHA) put in place a moratorium on evictions and foreclosures on FHA-insured homes on March 18, 2020. The order was extended for the third time on August 27, 2020 through the end of the year. |
| Initial six-month mortgage forbearance application period for FHA borrowers | The CARES Act provided an optional six-month mortgage forbearance for homeowners with FHA-backed loans. The initial deadline to apply was October 30, but the FHA subsequently extended the application period through December 31, 2020. Borrowers can seek a six-month extension to the initial period, so borrowers who apply by December 31 are eligible for up to 12 months of forbearance relief. |
Non-COVID Tax and Trade Extenders (expiring December 31)
| Expiring Provision | More Information |
|---|---|
| Lower medical expense deduction threshold | The deduction would shrink, covering expenses that exceed 10% of adjusted gross income instead of 7.5% currently as provided by the TCJA. An extension through 2020 of this lower threshold was included in the deal to fund the government for the rest of FY 2020. |
| Paid family leave credit expires | The TCJA created a paid leave credit to reimburse employers providing family and medical leave to their employees, which expires at the end of 2019. An extension through 2020 was included in the deal to fund the government for the rest of FY 2020. |
| Tax extenders | Includes approximately 30 temporary tax breaks that routinely expire and are routinely extended. Most of these provisions were last extended by the December 2019 deal to fund the government for the rest of FY 2020. They include credits for renewable energy, certain homeowners, racehorses, NASCAR tracks, tuition, films and foreign subsidies of US corporations. They also include empowerment zones, the new markets tax credit, and the work opportunity tax credit. |
| Generalized System of Preferences and Miscellaneous Tariff Bill | Provide lower tariffs on imports of certain items and from certain countries. |
Other Expiring Provisions (expiring December 18)
| Expiring Provision | More Information |
|---|---|
| Funding the government / appropriations | The current continuing resolution goes through Dec. 18, 2020. |
| Reauthorization of TANF & related programs | Temporary Assistance for Needy Families (TANF) and the Child Care Entitlement to States had been set to expire in November under an extension that was included in the CARES Act, but the September CR extended it into mid-December. |
| Health extenders | Various Medicare and Medicaid policies – including the delay of reductions to disproportionate share hospitals – will expire under the extensions that were included in the September CR. |
Note , this blog was updated on December 4, 14th, and 17th as deadlines change or get extended.
