The American Workers, Families, and Employers Assistance Act (S. 4318): Title II—Revenue Provisions and Other “HEALS Act” Tax Provisions

The American Workers, Families, and Employers Assistance Act (S. 4318): Title II—Revenue Provisions and Other “HEALS Act” Tax Provisions

The American Workers, Families, and
Employers Assistance Act (S. 4318): Title II—
Revenue Provisions and Other “HEALS Act”
Tax Provisions
July 29, 2020
Congressional Research Service
https://crsreports.congress.gov
R46470

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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Contents
Tables
Table 1. American Workers, Families, and Employers Assistance Act: Title II—Revenue
Provisions ................................................................................................................... 2
Table 2. American Workers, Families, and Employers Assistance Act: Tax Provision in
Title IV ....................................................................................................................... 8
Table 3. Tax Provisions in Other “HEALS Act” Legislation ................................................... 9

Contacts
Author Information ....................................................................................................... 10

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73
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ongress continues to consider proposals intended to al eviate the economic effects
associated with the Coronavirus Disease 2019 (COVID-19) pandemic. One such proposal,
C the American Workers, Families, and Employers Assistance Act (S. 4318), was introduced
in the Senate on July 27, 2020.
Title II of S. 4318 contains several provisions that would modify individual and business tax
liability, including
 a one-time direct payment for eligible individuals, and modifications to the
eligibility requirements for direct payments provided in the CARES Act;
 tax credits for employers and businesses vulnerable to COVID-19-related
interruptions; and
 clarifications and modifications to other tax provisions enacted through the
CARES Act.
Consideration of S. 4318 follows enactment of other laws targeting the effects of the COVID-19
crisis. Those laws are the
1. Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020
(P.L. 116-123);
2. Families First Coronavirus Response Act (FFCRA; P.L. 116-127);
3. Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136);1
and
4. Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139).
Active legislation that would also broadly address the COVID-19 crisis includes the Health and
Economic Recovery Omnibus Emergency Solutions (HEROES) Act (H.R. 6800), which was
passed by the House on May 15, 2020.2 Table 1 summarizes the major tax provisions in Title II
of S. 4318, as introduced. Links to CRS resources with additional relevant information are
provided in the table when available. An additional provision from Title IV to provide state tax
certainty for employers and employees is summarized in Table 2.
The American Workers, Families, and Employers Assistance Act is one component of what has
been referred to as the Health, Economic Assistance, Liability Protection, and Schools (HEALS)
Act.3 Another component, the Supporting America’s Restaurant Workers Act (S. 4319), would
al ow a full 100% deduction, as opposed to a 50% deduction, for business meals in 2020. The
Restoring Critical Supply Chains and Intel ectual Property Act (S. 4324) includes a provision that
would al ow an investment tax credit for qualifying medical personal protective equipment
manufacturing projects. These provisions are summarized in Table 3. Links to CRS resources
with additional relevant information are provided in the table when available.

1 For more on tax provisions in the CARES Act, see CRS Report R46279, The Coronavirus Aid, Relief, and Economic
Security (CARES) Act—Tax Relief for Individuals and Businesses, coordinated by Molly F. Sherlock. For more on
other CARES Act provisions, see CRS Report R46299, Coronavirus Aid, Relief, and Econom ic Security (CARES) Act:
CRS Experts, by William L. Painter and Diane P. Horn.
2 For more information on tax provisions in the HEROES Act, see CRS Report R46358, Health and Economic
Recovery Om nibus Em ergency Solutions (HEROES) Act: Division B —Revenue Provisions, coordinated by Molly F.
Sherlock.
3 Majority Leader Mitch McConnell, “McConnell Outlines Historic Relief Proposal for ‘An Important Crossroads in
this Battle,’” press release, July 27, 2020, at https://www.mcconnell.senate.gov/public/index.cfm/2020/7/mcconnell-
outlines-historic-relief-proposal-for-an-important-crossroads-in-this-battle.
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Table 1. American Workers, Families, and Employers Assistance Act: Title II—
Revenue Provisions
Assistance to Individuals, Families and Employers to Reopen the Economy
Section Title
Description
CRS Resources
Subtitle A—Relief for Individuals and Families
Additional 2020
Would enact additional direct payments for
For more, see:
recovery rebates for
individuals. Payments would equal $1,200 per

CRS Insight IN11473, COVID-
individuals
eligible individual ($2,400 for married joint
19: Summary of Direct Payments
filers), and $500 for each dependent. The
in the American Workers,
payment would phase out at a rate of $5 per
Families, and Employers
$100 of income above $75,000 ($112,500 for
Assistance Act (S. 4318), by
head of household filers, $150,000 for married
Margot L. Crandal -Hol ick.
joint filers).

CRS Insight IN11282, COVID-
Individuals who died before January 1, 2020,
19 and Direct Payments to
would be ineligible for the payments. Individuals
Individuals: Summary of the
incarcerated at the time the payment is
2020 Recovery
processed would be ineligible for these
Rebates/Economic Impact
payments in 2020. (Individuals incarcerated for
Payments in the CARES Act (P.L.
al of 2020 would also be ineligible to claim
116-136), by Margot L.
these payments on their 2020 income tax
Crandal -Hol ick.
return.)a

General y, al individuals (including dependents)

CRS Report R46467, CARES
Act Payments Use and Recipient
would need to have Social Security numbers
Characteristics: In Brief, by Mark
(SSNs) associated with work authorization to
P. Keightley.
receive the payment. (Among members of the
Armed Forces, only one spouse would need to

CRS Insight IN11397, COVID-
have such an SSN.)
19: Summary of the Direct
These payments would be structured as
Payments Proposed in the
refundable tax credits against 2020 income
HEROES Act (H.R. 6800), by
taxes. They would be advanced (and hence
Margot L. Crandal -Hol ick.
received) in 2020, as opposed to 2021 (when

CRS Insight IN11358, Older
2020 income tax returns wil be filed). Amount
Children, Adult Dependents, and
and eligibility for the advanced credit would
Eligibility for the 2020 Recovery
general y be based on information from 2019
Rebates, by Margot L. Crandal -
income tax returns (or 2018 returns, if 2019
Hol ick.
had not been filed).

CRS Insight IN11290, COVID-
These payments would general y be exempt
19 and Direct Payments to
from offset for debts owed to or col ected by
Individuals: Economic Impact
governmental agencies (except past-due child
Payments (EIPs) for Social
support). Offset general y reduces a payment
Security and Supplemental
before it is issued. These payments would also
Security Income Beneficiaries, by
general y be protected from certain debt
Paul S. Davies and Wil iam R.
col ection actions by certain creditors (such as
Morton.
certain garnishments or levies), including private

CRS Insight IN11375, CARES
creditors. (These types of actions general y
Act Economic Impact Payments
occur after payments have been made.)
for Veterans Not Required to File
For eligible individuals who did not file a 2019
Tax Returns, by Heather M.
or 2018 income tax return and who were
Salazar.
recipients of Social Security, Supplemental

Security Income (SSI), Railroad Retirement, or

CRS Insight IN11322, The Child
Support Federal Tax Offset of
Department of Veterans Affairs (VA) benefits,
CARES Act Economic Impact
Treasury would be directed to issue payments
Payments, by Jessica Tol estrup.
based on information provided by the Social
Security Administration (SSA), Railroad

CRS Report R46415, CARES
Retirement Board (RRB), or VA.
Act (P.L. 116-136) Direct
Payments: Resources and
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Section Title
Description
CRS Resources
Direct payments issued to a representative
Experts, coordinated by Margot
payee ("payee”) or fiduciary on an eligible
L. Crandal -Hol ick.
beneficiary’s behalf would be required to be

CRS Insight IN11457, COVID-
used for the sole benefit of the entitled
19 Pandemic’s Impact on
beneficiary.
Household Employment and
Receiving the payments in 2020 would not affect
Income, by Gene Falk.
income tax liabilities or tax refunds. If a
taxpayer received a larger payment in 2020 than
they were eligible for on their 2020 income tax
return, they general y would not be required to
pay it back. If an individual received a payment
less than what they were eligible for on their
2020 income tax return, they could claim the
difference on that return (filed in 2021).
Modifications to
Would make three modifications to the CARES
For more, see:
recovery rebates made
Act direct payments: (1) would make individuals

CRS Insight IN11473, COVID-
under the CARES Act
who died before January 1, 2020, ineligible for
19: Summary of Direct Payments
the CARES Act payments; (2) would make
in the American Workers,
individuals incarcerated at the time the payment
Families, and Employers
is processed ineligible for the CARES Act
Assistance Act (S. 4318), by
payments issued in 2020. (Individuals
Margot L. Crandal -Hol ick.
incarcerated for al of 2020 would also be
ineligible to claim these payments on their 2020

CRS Report R46415, CARES
income tax return);a and (3) would expand the
Act (P.L. 116-136) Direct
CARES Act provisions that currently protect
Payments: Resources and
these payments from offset (reduction before
Experts, coordinated by Margot
payment are issued) by also exempting these
L. Crandal -Hol ick.
payments from garnishment, levy, attachment,
and other similar debt col ection actions by
certain creditors, including by private creditors.
These types of actions (i.e., garnishment, levy,
attachment) general y occur after payments have
been made.
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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Section Title
Description
CRS Resources
Subtitle B—Job Creation and Employment
Enhanced employee
Would modify the employee retention tax
For more, see:
hiring and retention
credit (ERTC), first enacted in the CARES Act,

CRS Insight IN11299, COVID-
payrol tax credit
to (1) increase the credit rate from 50% to 65%;
19: The Employee Retention Tax
(2) increase the amount of wages that can
Credit, by Mol y F. Sherlock.
qualify for the credit from $10,000 to $10,000
per calendar quarter (limited to $30,000 for the

CRS Insight IN11324, CARES
year); (3) reduce the decline in gross receipts
Act Assistance for Employers and
threshold for credit eligibility from 50% to 25%,
Employees—The Paycheck
and al ow certain employers to determine third
Protection Program, Employee
or fourth quarter eligibility using the prior
Retention Tax Credit, and
quarter’s gross receipts; (4) increase the
Unemployment Insurance
threshold for which the credit can only be
Benefits: Overview (Part 1),
claimed for wages paid when services are not
coordinated by Mol y F.
provided from 100 to 500 ful -time employees;
Sherlock.
and (5) al ow employers receiving Paycheck

CRS Insight IN11329, CARES
Protection Program (PPP) loans to claim the
Act Assistance for Employers and
ERTC (subject to certain limitations). These
Employees—The Paycheck
changes would general y be effective beginning
Protection Program, Employee
in the calendar quarter of enactment.
Retention Tax Credit, and

Unemployment Insurance
Benefits: Assessment of
Additional changes, retroactive to the CARES
Alternatives (Part 2),
Act, would (1) clarify that group health plan
coordinated by Mol y F.
expenses are considered qualifying wages, even
Sherlock.
when no other wages are paid; and (2) modify
the definition of gross receipts to include gross

receipts of a tax-exempt organization.
Expansion of work
Would temporarily expand the Work
For background, see:
opportunity credit
Opportunity Tax Credit (WOTC) by creating a

CRS Report R43729, The Work
new targeted group for a “qualified 2020
Opportunity Tax Credit, by
COVID-19 unemployment recipient.” The
Benjamin Col ins and Sarah A.
provision would also increase the credit rate
Donovan.
and maximum eligible wages for this new
targeted group if hired or rehired and starting
work prior to January 1, 2021. These changes
would result in a maximum WOTC per
employee of $5,000 (50% of the first $10,000 of
wages) compared to the current maximum for
existing WOTC groups of $2,400 per employee
(40% of the first $6,000 of wages).
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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Section Title
Description
CRS Resources
Safe and healthy
Would provide a refundable payrol tax credit

workplace tax credit
for qualified employee protection, workplace
reconfiguration, and workplace technology
expenses. The credit would be 50% of qualified
expenses, limited to $1,000 for each of the first
500 employees, plus $750 for each employee
between 500 and 1,000 employees, plus $500
for each employee above 1,000 employees.
Qualified employee protection expenses include
amounts paid for testing, protective equipment
(such as gloves and masks), and cleaning
products or disinfectants. Qualified workplace
reconfiguration expenses include expenses
associated with redesigning or reconfiguring
workplaces or retail spaces to prevent the
spread of COVID-19. Qualified workplace
technology expenses include technology
systems used to prevent the spread of COVID-
19. Governmental employers would not be
eligible for this credit. Self-employed individuals
would be al owed a refundable income tax
credit of up to $500 for similar expenses.
Credit could be claimed for qualified expenses
paid or incurred after March 12, 2020, and
before January 1, 2021.
A general fund transfer of revenue to the Old-
Age and Survivors Insurance Trust Fund, Federal
Disability Insurance Trust Fund, and Railroad
Retirement Trust Fund would be made to
maintain trust fund balances.
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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Section Title
Description
CRS Resources
COVID-19 assistance
Would al ow marketplace platform operators to
For background, see:
provided to
provide certain benefits (such as equipment,

CRS Report R44365, What
independent
supplies, training, and testing to prevent the
Does the Gig Economy Mean for
contractors
spread of COVID-19) to service providers (e.g.,
Workers?, by Sarah A.
gig economy workers) without jeopardizing the
Donovan, David H. Bradley,
provider’s independent contractor status. These
and Jon O. Shimabukuro.
benefits, other than cash payments, would not
be taxable to the providers. The provision
applies to benefits provided after March 12,
2020, and before January 21, 2021.
Subtitle C—CARES Act Clarifications and Corrections
Application of special
This provision would clarify that the
For more, see:
rules to money
distributions from retirement plans for

CRS In Focus IF11472,
purchase pension plans
coronavirus-affected individuals in the CARES
Withdrawals and Loans from
Act apply to money purchase plans. Money
Retirement Accounts for COVID-
purchase plans are defined contribution plans
19 Expenses, by John J.
that require employers to contribute a certain
Topoleski and Elizabeth A.
percentage of the employee’s salary to the plan.
Myers.
The CARES Act provides an exception to the
10% early withdrawal penalty for distributions

CRS In Focus IF11482,
up to $100,000 for coronavirus-affected
Retirement and Pension
individuals. Income from such distributions can
Provisions in the Coronavirus Aid,
be recognized over three years, and taxpayers
Relief, and Economic Security Act
can recontribute funds to an eligible retirement
(CARES Act), by John J.
plan in the first year or within three years
Topoleski and Elizabeth A.
without regard to the year's contribution cap.
Myers.
For coronavirus-affected individuals, loan limits

CRS Report R45864, Tax Policy
from retirement plans are increased from
and Disaster Recovery, by Mol y
$50,000 to $100,000 and the repayment
F. Sherlock and Jennifer Teefy.
deadline is delayed for loans that are due in

CRS In Focus IF11447, COVID-
2020.
19: Social Insurance and Other
Income-Support Options for
Those Unable to Work,
coordinated by Laura Haltzel.
Clarification of delay in
The CARES Act delayed minimum contributions
For more, see:
payment of minimum
for single employer retirement plans for 2020.

CRS Report R46366, Single-
required contributions
This provision would make the due date
Employer Defined Benefit Pension
January 4, 2021, rather than January 1, 2021.
Plans: Funding Relief and
Modifications to Funding Rules,
by John J. Topoleski and
Elizabeth A. Myers.
Employee certification
The CARES Act al owed employees to self-
For more, see:
as to eligibility for
certify eligibility for coronavirus-related

CRS In Focus IF11472,
increased CARES Act
distributions from retirement plans that
Withdrawals and Loans from
loan limits from
received benefits such as exclusion from the
Retirement Accounts for COVID-
employer plan
10% early withdrawal penalty, a delay in paying
19 Expenses, by John J.
income taxes, and the ability to recontribute
Topoleski and Elizabeth A.
funds. This provision would extend that self-
Myers.
certification to increased loan limits.
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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Section Title
Description
CRS Resources
Election to waive
Would al ow farmers who elected a two-year
For more, see:
application of certain
net operating loss carryback prior to the

CRS Insight IN11296, Tax
modifications to
CARES Act to elect to retain that two-year
Treatment of Net Operating
farming losses
carryback rather than claim the five-year
Losses (NOLs) in the Coronavirus
carryback provided in the CARES Act. This
Aid, Relief, and Economic Security
provision would apply retroactively as if
(CARES) Act, by Jane G.
included in the CARES Act. It also would al ow
Gravel e.
farmers who had previously waived an election
to carry back a net operating loss to revoke

CRS Insight IN11240, COVID-
that waiver.
19: Potential Role of Net
Operating Loss (NOL) Carrybacks
in Addressing the Economic
Effects, by Mark P. Keightley.

CRS Report R46377, The Tax
Treatment and Economics of Net
Operating Losses, by Mark P.
Keightley.
Oversight and audit
Would expand the CARES Act list of
For background, see:
reporting
“appropriate congressional committees” that

CRS Report R46315,
would be briefed by and receive reports from
Congressional Oversight
the Comptrol er General to include the House
Provisions in the Coronavirus Aid,
Ways and Means Committee and the Senate
Relief, and Economic Security
Finance Committee.
(CARES) Act (P.L. 116-136), by
Under the CARES Act, the Comptrol er
Ben Wilhelm and Wil iam T.
General is directed to conduct monitoring and
Egar.
oversight of the federal response to the

CRS Insight IN11271,
COVID-19 pandemic and provide briefings and
Congressional Oversight
reports to “appropriate congressional
Provisions in P.L. 116-127, the
committees.”
Families First Coronavirus
Response Act, by Ben Wilhelm.

CRS Insight IN11236, Oversight
Provisions in H.R. 6074, the
Coronavirus Preparedness and
Response Supplemental
Appropriations Act, by Ben
Wilhelm.

Source: CRS analysis of S. 4318.
Notes:
a. For the purposes of this provision, incarcerated individuals are those as defined under 42 U.S.C.
402(x)(1)(A).

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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Table 2. American Workers, Families, and Employers Assistance Act: Tax Provision in
Title IV
Section Title
Description
CRS Resources
Title IV—Additional Flexibility and Accountability for Coronavirus Relief Fund Payments and State
Tax Certainty for Employers and Employees
State tax certainty for
Would provide that employees who perform

employers and
employment duties in more than one state be
employees
subject to income taxes only in their state of
residence and any state in which they are
present and performing employment duties for
more than a limited time (general y 30 days)
during the calendar year. The provision would
set a 90-day threshold for income earned in
states other than the taxpayer’s state of
residence due to the COVID-19 pandemic
(during 2020). The provision would not apply to
professional athletes, professional entertainers,
qualified film or television production
employees, or certain public figures. This
treatment would apply through December 31,
2024.

Would provide that taxpayers working
remotely in a taxing jurisdiction that differs from
that of their primary employer can have wages
deemed earned at their primary work location.
This treatment would apply until employees of
the employer general y return to the work
location or through December 31, 2020.
Source: CRS analysis of S. 4318.

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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Table 3. Tax Provisions in Other “HEALS Act” Legislation
Section Title
Description
CRS Resources
Supporting America’s Restaurant Workers Act (S. 4319)
Temporary al owance
The proposed modification would al ow a 100%
For more, see:
of ful deduction for
deduction for business meals for the remainder

CRS Insight IN11313, Business
business meals
of 2020. Businesses can deduct expenses for
Deductions for Entertainment
meals associated with the active conduct of the
and Meals, by Donald J.
taxpayer’s trade or business. This deduction is
Marples.
general y limited to 50% of the amount spent.
Restoring Critical Supply Chains and Intellectual Property Act (S. 4324)
Investment credit for
Would provide a competitively awarded tax

qualifying medical
credit to qualifying medical personal protective
personal protective
equipment manufacturing projects. Qualifying
equipment
projects would be those that reequip, expand,
manufacturing projects
establish, or continue a manufacturing facility for
the production of personal protective
equipment. The Secretary of the Treasury, in
consultation with the Secretary of Health and
Human Services, would al ocate the credits by
considering several factors: (1) the potential to
result in domestic job creation, (2) the potential
to increase medical personal protective
equipment in the Strategic National Stockpile,
(3) the potential to help achieve medical
manufacturing independence for the United
States, and (4) the potential to handle surges in
the demand for personal protective equipment.
The total al ocation of tax credits is capped at
$7.5 bil ion and the maximum credit rate
al owed is 30%. Unused credits could be
real ocated and al ocations awarded would be
publicly disclosed.
Special rules for
Would al ow firms to transfer intangible
For background, see:
transfers of intangible
property abroad (such as patents, formulas,

CRS Report R45186, Issues in
property relating to
designs, and processes) to the United States
International Corporate Taxation:
medical personal
without a tax on the distribution, if related to
The 2017 Revision (P.L. 115-97),
protective equipment
manufacturing personal protective equipment
by Jane G. Gravel e and
to United States
and eligible for the 30% investment tax credit
Donald J. Marples
shareholders
under the investment credit for qualifying
medical personal protective equipment
manufacturing project of this act.
Source: CRS analysis of S. 4319 and S. 4324.
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The American Workers, Families, and Employers Assistance Act: Revenue Provisions

Author Information

Molly F. Sherlock, Coordinator
Jane G. Gravelle
Specialist in Public Finance
Senior Specialist in Economic Policy

Grant A. Driessen
Donald J. Marples
Analyst in Public Finance
Specialist in Public Finance

Margot L. Crandall-Hollick

Acting Section Research Manager

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
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under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
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