How the Federal stimulus bill affects the court reporting and captioning industry

This is important information regarding the Federal stimulus bill for NCRA members who are independent contractors (i.e. freelancers) in the reporting and captioning industry, as well as legal videographers, scopists, and others in our industry. NCRA’s Government Relations department has been actively following all bills and is working to make sure that our freelance community is heard. Special thanks to NCRA’s lobbyist, Jocelynn Moore, for pulling a lot of this together. We understand the impact of this bill on all of us and want to try and give you timely updates.

As with everything COVID-19, things are changing hourly. There is a call to action for you at the end of this communication to push this across the finish line, so PLEASE read the entire message. I apologize that this is long, but this is crucial information for you and your business.

On Wednesday night, the U.S. Senate passed a $2 trillion stimulus package (96-0 for passage) that included many things that will help the average American survive the pandemic we are currently experiencing. The 880-page piece of legislation included many things to help employers, employees, and independent contractors. We will give you a high-level analysis of this massive bill, but we will be working over the next weeks to dive into it and give you direction on where you can seek assistance. Please understand that this is not legal or employment advice but simply guidance. Your professional Association is trying to provide you with the direction to apply for assistance, if needed. We will continue to provide information, links, and analysis as funding and opportunities present themselves. This is exactly why being a member is important and what NCRA is here for.

Here are some bullet points regarding the passed Senate bill.

H.R. 748, Coronavirus Aid, Relief, and Economic Security Act (CARES) Act

  • This is the $2 trillion Coronavirus Relief package.
  • It was passed by the Senate on March 25, 2020, by a 96-0 vote, and heads to the House for a voice-vote to be held tomorrow, Friday, March 27, 2020.
  • Upon passage by the House and signature by the President, the bill will be enacted into law.
  • The bill, as passed by the Senate, contains provisions to provide financial assistance to American adults, extension of the unemployment insurance program for laid-off workers, and loans for small businesses impacted by coronavirus, among other provisions. The relevant provisions pertinent to court reporters and captioners are detailed below.

Title 1 – Keeping American Workers Paid and Employed Act

Provision: Sec. 1102. Paycheck Protection Program.(Small Business Loans)

Purpose: This is emergency assistance from the U.S. Small Business Administration (SBA) and the Department of Treasury, which provides $350 billion in funding for a provision to create a Paycheck Protection Program (PPP). The PPP provides small businesses and other entities with zero-fee loans of up to $10 million dollars. This emergency assistance can be used in conjunction with other COVID-19 assistance established by Congress or another SBA loan program.

Individuals Eligible for Relief:

  • Small Businesses, 501(c)(3) non-profit organizations, 501(c)(19) veteran’s organizations, or tribal businesses with fewer than 500 employees.
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals
  • Businesses with more than one physical location, so long as no more than 500 employees are employed in each location.

Description of Relief:

  • The maximum loan amount that may be borrowed will be $10 million dollars with a maximum interest rate of 4 percent through December 31, 2020.
  • The allowable uses of the loan include payroll support (employee salaries), paid sick leave, paid medical leave, insurance premiums, business mortgage payments, business rental payments, and business utility payments.
  • Requires eligible borrowers to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19 and that the loan funds will be used for the above business purposes.
  • Up to eight weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels.
  • Principal and interest are deferred for up to a year and all borrower fees waived.

Additional Information: The covered loan period begins on February 15, 2020, and ends on June 30, 2020.

Specific Provision: Sec. 1110. Emergency Economic Injury Grants

Purpose: Expands eligibility for access to Economic Injury Disaster Loans (EIDL) to include small businesses during the covered period of January 31, 2020, to December 31, 2020. The stimulus includes $10 billion in funding for a provision to provide an advance of $10,000 to small businesses and non-profits that apply for an SBA economic injury disaster loan within 3 days of applying for the loan.

Individuals Eligible for Relief:

  • Small businesses
  • Employee-owned businesses
  • Cooperatives
  • Individuals operating as sole proprietors
  • Individuals operating as independent contractors
  • Private non-profit organizations and tribal organizations.

Description of Relief:

  • This provision establishes an Emergency Grant to allow an eligible entity who has applied for an EIDL loan due to COVID-19, to request an advance on that loan of not more than $10,000. The Small Business Administration (SBA) must then distribute that grant within three days.
  • Borrowers may loan up to $2 million dollars with an interest rate of 3.75 percent for companies and 2.75 percent for nonprofits, with principal and interest deferment for up to four years.
  • Approval based solely on an applicant’s credit score or use of an appropriate alternative method to determine applicant’s ability to pay.
  • The loans may be used to provide paid sick leave to employees, maintain payroll, meet increased production costs, and business obligations such as rental or mortgage payments.
  • Eligible grant recipients must have been in operation on January 31, 2020.

Title 2 – Assistance for American Workers, Families, and Businesses:

Subtitle A – Unemployment Insurance

Specific Provision: Sec. 2102. Pandemic Unemployment Assistance.

Purpose: Creates a new program modeled on Disaster Unemployment Assistance to individuals that provides unemployment compensation to individuals who do not normally qualify for unemployment benefits and who are not able to work due to the COVID-19 pandemic.

Individuals Eligible for Relief:

  • Self-employed workers, including gig workers and independent contractors
  • Part-time workers
  • Workers with limited work histories

Description of Relief: Sections 2104 and 2107 define the relief:

  • Sec. 2104: Provides an emergency increase in unemployment compensation by adding an additional, taxable $600 to every weekly unemployment benefit. The increase will last until July 31, 2020.
  • Sec. 2107: Provides emergency unemployment compensation, which would make available 13 additional weeks of federally funded unemployment compensation for individuals who have exhausted their state unemployment benefits. This will be available immediately through December 31, 2020.

Additional Information: This entire program is administered through the states, is federally funded, and will be effective through December 31, 2020.

Subtitle B – Individual Provisions

Specific Provision: Sec. 2201. Recovery Rebates for Individuals.

Description of Relief:

  • This provision provides $1,200 for single individuals an heads-of-households ($2,400 for couples filing joint tax returns). It also provides $500 per qualifying child dependent under age 17. For instance, a family of four would receive $3,400.
  • The payments phase out at a 5 percent rate above adjusted gross incomes of $75,000 for single individuals, $122,500 for heads-of-households, and $150,000 for married couples who file jointly.
  • Tax filers must provide Social Security Numbers (SSN) for each family member claiming a rebate payment (there is an exception for spouses of active military members.
  • The rebate payments are fully available to residents of all 50 U.S. States and U.S. Territories, including Puerto Rico.
  • The payments will be paid out in the form of a check or direct deposit on the basis of the taxpayers’ filed tax year 2019 returns (or 2018 if not yet filed).
  • The rebate payments will be made between now and December 31, 2020.

Subtitle C – Business Provisions

Specific Provision: Sec. 2301. Employee Retention Credit for Employers Subject to Closing or Experiencing Economic Hardship Due to COVID-19.

Purpose: This provision provides a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis.

Individuals Eligible for Relief:

  • Employers or Non-Profit Organizations whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel, or group meetings.
  • Employers who have experienced a greater than 50 percent reduction in quarterly receipts (measured on a year-over-year basis).
  • Employees who are furloughed or face reduced hours as a result of their employers’ closure or economic hardship due to COVID-19.
  • Employers with 100 or fewer full-time employees, regardless of whether the employee is furloughed.
  • NOT ELLIGIBLE: If an employer is already receiving a Small Business Interruption Loan.

Description of Relief:

  • The credit is provided to employers for wages and compensation, including health benefits.
  • The credit is provided for the first $10,000 in wages and compensation paid by the employer to an eligible employee.
  • Wages do not include payroll credits for required paid sick leave, paid family leave, or paid family and medical leave.
  • The Secretary of the Treasury makes these payments to eligible employers.
  • The credit is provided through December 31, 2020.

Specific Provision: Sec. 2302. Delay of Payment of Employer Payroll Taxes.

Purpose: This provision allows taxpayers to defer paying the employer portion of certain payroll taxes through 2020 to alleviate the burden of employers struggling to make payroll.

Description of Relief:

  • Allows employers’ share of the 6.2 percent Social Security tax to be deferred past the current 2020 taxable year. Fifty percent of the tax will be due on December 31, 2021, and the other fifty percent will be due on December 31, 2022.
  • A self-employed taxpayer can defer paying 50 percent of his or her self-employment tax past the current 2020 taxable year. Twenty-five percent will be due on December 31, 2021, and the other twenty-five percent will be due on December 31, 2022.

The House of Representatives will be voting on this bill on Friday, so it is CRITICAL you call your House member and ask them to pass the stimulus bill. You are encouraged to tell them how important this is to you personally and your need for economic relief, and to thank them for thinking of the average American (as a freelancer, employee, or employer). That is really all you need to say to the office.

You can find your personal House member by going here https://www.house.gov/ and typing in your zip code in the upper righthand corner of the landing page.

We hope you and your loved ones remain safe and healthy. We will continue to work for you on these issues and provide resources to help you during these unprecedented times.

Sincerely,

Dave Wenhold, CAE, PLC

NCRA’s Executive Director