Hiring and Growth

January 22, 2021: How Will the Biden Administration Impact Small Businesses?

Gusto Editors  
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January 22, 2021

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How will the new administration impact small businesses?

With this week’s inauguration, we ushered in a new administration. This can signal the onset of many changes that may affect small businesses.

Here are the areas Gusto’s legal pros expect to be impacted by the incoming administration and changes in Congressional leadership.

Relief

Last week, we discussed a new $1.9 trillion relief bill that has been proposed and will be reviewed by Congress in the coming months. We anticipate the package to include, among other things: 

  • A comprehensive vaccination plan
  • Extensions of unemployment insurance and the federal eviction moratorium
  • $2,000 direct payments
  • Additional relief modeled after the House-passed HEROES Act, including robust funding for state and local governments

Healthcare

Congress is expected to:

  • bolster the Affordable Care Act (ACA) and increase health coverage,
  • potentially expand Medicare, and 
  • enact regulations related to prescription drug pricing.

Taxes

Comprehensive action on tax reform will be difficult to achieve, but we may see increases in individual and corporate tax rates, particularly for the top tiers. Additionally, we may see an increase in the $120,000 payroll tax cliff for higher earners. 

Labor & Employment 

With the incoming administration, we may see:

  • The Department of Labor (DOL) move toward a more restrictive view of contractor classification;
  • Greater OSHA regulation, including that of workplace COVID-19 safety measures;
  • A broader push on equal pay;
  • Increased minimum wage and paid family leave;
  • Federal ban the box requirements limiting the use of criminal convictions in hiring. 

Free File this tax season

At this time of year you’re probably thinking a lot about filing your business taxes—and if you haven’t heard of the IRS’s Free File program, you need to. It lets qualifying taxpayers prepare and file their federal income tax returns online for free, through an IRS partner site. These free online tax preparation and electronic filing services are available to over 70% of US taxpayers.

Eligibility is based on your adjusted gross income (AGI). If your AGI is $72,000 or less, you’ll qualify for free federal tax filing on a partner site. 

Learn more about Free File here.

Watchlist

What You Need to Know About PPP Round 2: Applications, Forgiveness, and Tax Implications

With PPP round 2 in full swing, we’ve teamed up with our partners at Bench for a live event covering borrowers’ biggest questions on Wednesday, January 27, at 11am PT | 2pm ET. We’ll cover how to apply for first and second draw loans, what’s new with forgiveness, and how PPP will affect your taxes this upcoming filing season.

Register here.

A Discussion on the Employee Retention Tax Credit with Rep. Stephanie Murphy

Rep. Stephanie Murphy was the first member of Congress to recommend an updated version of the employee retention tax credit (ERTC) and was crucial in its inclusion in the CARES Act. Join Gusto on Tuesday, January 26, at 8am PT | 11am ET for a special discussion on the ERTC featuring Congresswoman Murphy, her Senior Advisor Jeffrey Rapp, and Gusto’s Payroll Tax Compliance Lead Shelly Abril.

Register here.

Top relief options for the week

  • State of Michigan has allocated $3.5 million to create the Michigan Stages Survival Grant Program to provide grants to entertainment venues affected by the COVID-19 pandemic. The grant application is now open and will close on at 12:00 p.m. EST on January 28, 2021.
  • Saint Louis County, Minnesota is providing approximately $3.8 million in grants to assist county small businesses and nonprofits that were adversely affected by the COVID pandemic. Applications will be accepted through February 3, 2021.
  • Fiserv is offering metro Atlanta’s minority-owned small business owners up to $10,000 each in grants through the Back2Business program.
  • See more relief options in our Small Business Relief Finder.

Want more small business news and resources? Check out past editions in our archive.

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