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The Consolidated Appropriations Act, 2020 H.R. 133: An Analysis

February 24, 2021 (1 min read)


By: The Practical Guidance Tax Team

This article discusses the Consolidated Appropriations Act (the Act), passed by the House and Senate on December 21, 2020, and signed by President Trump on December 27, 2020. The Act pairs a roughly $900 billion novel coronavirus relief bill with a $1.4 trillion omnibus appropriations package to fund the government through September 30, 2021, the end of the fiscal year. The Act provides taxpayers monetary relief from the novel coronavirus pandemic, extends expiring tax provisions and health extenders, includes a deduction for corporate meals, and prohibits surprise medical bills. The Act also clarifies that forgiven loans are not included in taxable income. The Act also includes new Internal Revenue Code (I.R.C.) sections tied to health care, referred to as the No Surprises Act. These provisions restrict plans and insurers from charging health care plan holders out-of-network rates for certain services.

Novel Coronavirus Relief

The Act represents the fourth piece of legislation intended to address the economic impacts of the novel coronavirus pandemic. It represents one of the longest pieces of legislation at almost 5,600 pages. The Act includes about 80 tax-related provisions. The total cost of the tax break is about $328 billion, according to the Joint Committee on Taxation.

The Act is intended to provide relief to mitigate COVID-19 effects driving increased unemployment, evictions, and food insecurities. To this end, the Act provides direct payments to U.S. residents meeting income thresholds. Adults earning up to $75,000 will receive a $600 check. Couples who earn up to $150,000 combined will receive a $1,200 check. Parents will also receive $600 for each child dependent under the age of 17, but there is no relief provided for older children or adult dependents. There is a phase-out at certain rates for those earning above $75,000. The Act establishes a $300 per week supplemental jobless benefit that spans 11 weeks. The $300 per week for 11 weeks represents half of what the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (H.R. 748) provided in March 2020. The direct $600 payment represents half of what the CARES Act provided. CLICK HERE TO READ THE FULL ARTICLE IF YOU ARE A PRACTICAL GUIDANCE SUBSCRIBER