22 Dec 2020 New Stimulus Bill and PPP Updates
On Dec. 22, 2020, Congress passed the latest COVID-19 Relief Bill. This is the largest bill ever passed by Congress at over 5,500 pages. It contains over $900 billion of additional stimulus funding and provides for several key tax extenders and other tax changes. The bill is awaiting President Trump’s signature.
Below you will find key highlights of this new stimulus bill including Individual Stimulus Payment information, PPP deductibility fix and round two of the PPP Loans (PPP2).
Highlights:
Deductibility of PPP loan-related expenses
- PPP expenses are deductible! as well as for PPP2 loans
- PPP Loans of $150,000 will not need to submit documentation for forgiveness. There is a one page application, and you should maintain the documentation in the file as there will be random checks.
- EIDL Grant Advances of $10,000 will not impact PPP Loan Forgiveness (not added to PPP Loans as previously stated).
- Learn more.
Paycheck Protection Program: There is $284 Billion in additional funding now available for PPP Loans. Congress gave the SBA 10 days to issue regulations on PPP2 so we expect this to be available in January. We recommend that you have your books and records up to date. Talk with your banker or Haynie CPA if you have questions.
Requirements for PPP2 loans
- 300 employees or fewer
- Maximum $2 million loan
- At least one quarter in 2020 with a 25% reduction in revenues from 2019
- 2.5x of 2019 or 2020 average monthly payroll costs
- 501(c)(6) organizations eligible
- Plan to apply in early January 2021
- Learn more.
Relief for Hotels and Restaurants
- 3.5 months (increased from 2.5 month) payroll expenses up to maximum $2 million amount
Individual Stimulus Payments
A one-time direct payment of $600 per individual, $1200 for married couple filing jointly plus $600 for each dependent child under age 17. Phase-out starts at $75,o00 single, $150,000 married. This round of stimulus payments could show up in taxpayer accounts as early as next week.
Expansion of Employee Retention Credit for Q1 and Q2 2021
- PPP borrowers may now be eligible for ERC tax credit
- 70% of first $10,000 employee wages per quarter
- 20% reduction in quarterly revenue to qualify
- Learn more
Extension of Sick leave tax credits through Q1 2021
Tax Extenders
- About 40 tax extenders
- Some of which have been made permanent
- Some extended to 2021
- Some extended to 2025
- Meals 100% deductible 2021 and 2022
- Learn more