Leading Republican Senators have released their proposal for relieving taxes on small businesses and providing cash payments to individuals.
The Democrats will have a separate package with more emphasis on unemployment compensation and increasing Social Security benefits. That legislation is being filed shortly.
In the Republican bill, headed by Sen. Charles Grassley, R-IA, are these provisions:
- $1,200 cash payments to individuals with incomes under $75,000. These payments will be reduced for individuals with incomes up to $91,000 ($198,000 for joint taxpayers). The incomes will be based upon the 2018 tax returns.
- Tax return due dates will be moved to July 15. Estimated tax payments would be moved to October 15.
- Employers will be able to defer deposits of Social Security taxes for employees (6.2 percent tax on wages) and pay off that obligation in 2021 and 2022.
- More flexible allowance for using prior year losses to reduce tax obligations would allow amendment of prior year tax returns. Losses from 2018-2020 could be carried back five years to produce tax refunds upon refiling. This provision would apply both to corporations and passthrough entities (such as Subchapter S companies).
The Senate continues to work on other stimulus legislation directed at economic damage from the widespread coronavirus. The Grassley and Wyden proposals are likely to be debated today and Saturday.