What Advisors Need to Know About the Latest COVID-19 Relief Package

The American Society for Travel Advisors (ASTA) on Thursday shared an update on the current relief and additional measures it will be lobbying for its members, and how its members can access programs installed by the latest round of U.S. COVID-19 relief, called The COVID-19 Emergency Relief Act of 2020.

The Act, which passed late last month, provided more than $900 billion worth of relief for U.S. industries. And while it’s good news, and a bridge into 2021 for a lot of small businesses, ASTA President and CEO Zane Kerby said at the time that a more comprehensive package targeted at the travel industry is still needed.

While the relief package is not as generous as earlier proposals, it does provide a number of new relief options that ASTA supported over months of lobbying that will benefit travel businesses of all shapes and sizes.

The new legislation included $284 billion for second draw Paycheck Protection Program (PPP) loans for businesses and ICs with fewer than 300 employees and at least a 25% revenue reduction in 2020. Eben Peck, EVP of Advocacy at ASTA, said the loan programs provides a lot flexibility on how the funds can be spent and how the time they have to spend these funds, and applications are open through March.

The COVID-19 Emergency Relief Act of 2020 also greatly expanded the Employee Retention Tax Credit, allowing businesses to get refundable credit from the IRS. The CARES Act had the credit at $5,000 per employee, but the new bill restarts it for 2021 to $14,000 per employee but it only runs through the first and second quarters of the year.

This can be requested in advance. As soon as the IRS posts the forms, travel advisors can request in advance and get funds for that quarter. “Cash flow is an issue and this will allow our members to get funds quickly,” Peck said.

A new benefit of the bill allows advisors to request a PPP loan and claim the tax credit, retroactively, while the CARES Act was one or the other. The only restriction is the funds cannot be used to pay for the same expenses or payroll.

However, Peck noted that the unemployment assistance program—which includes independent contractors—is a little less generous when compared to the CARES Act, with an additional $300 per week that is only through March 14. Other additional benefits end in April.

While the relief is smaller than the CARES ACT, Peck said “some things better for our members, they can get the credit and second round of PPP loans.”

Now, ASTA will help members maximize these benefits, providing clarity for how they work.

“We’re here to help,” he said, and recommend getting started by contacting the bank to start the process for the PPP loan and contact an accountant to secure favorable tax treatment. The PPP loan in 2020 is taxable income, but there is zero negative tax implications now.

“Hopefully, process will be smother for second round of loans because the banks have been through this before,” Peck noted, as smaller businesses notably had a difficult time securing PPP loans the first time around.

“Although this latest legislation is not quite as generous, the tax credit we think is quiet beneficial,” added Senior Vice President and General Counsel Peter Lobasso.

Beyond getting members the most out of the benefits offered, ASTA will be working on securing another round of government relief. “Democrats have taken control of the Senate and I believe that increases the chances of another sizable COVID relief,” Peck said. This bill “provided some breathing room but we need more help.”

“The Georgia elections changed the landscape – there’s a sense [the Democrats] are going to want to do big things early in the year,” Peck said, adding we could see things happen as soon as February, especially with the unemployment expiring in March.

ASTA’s priorities going forward include several measures, including continuing to push for the RESTART Act, a new loan program to provide funding to cover 6 months of payroll, benefits, and fixed operating expenses for businesses that have taken a substantial revenue hit during the COVID-19 pandemic.

Peck said this forgivable loan program, much bigger than PPP forgiveness, is based on 2020 revenue. “We like that approach because our members lost a lot of revenue.”

“We need to support sectors that have been the most impacted and will take longest to recover, so we’re pushing for specific funding for travel businesses,” he continued. This includes a tax credit to “stimulate travel,” although this is “more of a recovery thing than relief.”

ASTA will also continue to support a liability shield, “we don’t want our members to have any legal exposure.” In the interim, Lobasso said members can have their clients sign waivers.

Beyond the relief bill, ASTA will encourage harmonizing international travel restrictions, including quarantine requirements and vaccination proof, as it’s complicated for travelers to navigate different rules for each country. Similarly, every state has different travel restrictions system. A set of standards outlined by the CDC will allow some level of travel and consistency. Finally, mandated masks on commercial planes will increase confidence of travelers and further help recovery.

Travel advisors who have had their loan forgiven can send ASTA questions and feedback here: www.asta.org/covid19member or govtaffairs@asta.org.