COVID Relief and Government Funding Legislation Delayed

Legislation to provide a new round of economic relief for victims of the coronavirus (COVID-19) pandemic and extend funding for federal government agencies remains in pending status.

As described in greater detail in our December 21 new posting, the primary focus of the pandemic relief is an extension of unemployment benefits, direct economic stimulus payments to American taxpayers, support for small businesses, and funding for COVID-19 vaccination and schools. Few provisions directly affect tax-advantaged savings arrangements. Among these are extending the Payroll Protection Program lending program—which can be used to deliver retirement and health benefits—providing relief from partial retirement plan terminations, extending special pandemic-related tax benefits to participants in money purchase pension plans, transfer of excess pension plan assets to health benefit accounts, and temporary relief for health and dependent care flexible spending arrangements.

However, after being passed by the U.S. Senate and House of Representatives, the legislation has not yet been signed into law. President Trump has cited several objections to the legislation’s provisions. It is not clear when, or if, the legislation in its present form will be signed into law, or what other procedures could potentially complete the process of enacting pandemic relief.