Congress has passed new COVID relief including stimulus payments and tax relief. The bill awaits the President’s signature, which is expected shortly. We’re providing some highlights here, but details of many of these provisions are not yet known since the bill is over 5,500 pages in length and will take time to digest.
Major provisions for small businesses:
- Paycheck Protection Program –
- Deductibility – Expenses paid with loan proceeds are now considered deductible. Loan forgiveness will no longer result in an increase in taxable income.
- Additional loans – The PPP will be expanded to allow some businesses to receive an additional loan. This is targeted to support businesses with 300 or fewer employees and with a reduction of at least 25% in gross receipts during the first, second or third quarter of 2020 as compared to the same period in 2019.
- Employee Retention Tax Credit – This credit provides employers with a reduction in their payroll taxes if they were required to fully or partially suspend operations by government order or experienced a 20% drop in quarter over quarter gross receipts. The credit has been extended to include wages through July 1, 2021. The credit can now be used by recipients of PPP for wages not paid with forgiven PPP funds.
- Deferral of payroll taxes – Employers who chose to defer the payment of payroll taxes during 2020 now have until December 31, 2021 to make payments without incurring penalties
Other provisions of note:
- Federal unemployment assistance – extended through March 14, 2021
- Stimulus checks of $600 per person – phase out begins when gross income is over $75,000 (single) or $150,000 (married filing jointly)
- Rental assistance – The Federal eviction moratorium has been extended through January 31, 2021. $25B is available for rental assistance.
- Food assistance
Read more on what we know now here:
We will continue to provide more information as it becomes available. Do not hesitate to reach out with your questions- we are here for you!