​What the Latest Round of COVID-19 Federal Relief Funding Means for You and Your Business

​What the Latest Round of COVID-19 Federal Relief Funding Means for You and Your Business

12/22/2020 Tags: Announcements, In the News, COVID-19, PPP

It took months of negotiating, but both houses of Congress passed a $900 billion relief fund and sent it to the president to sign.

Several outlets already outlined what the massive spending bill contains, including:

  • Another round of stimulus payments — this time $600 for most individuals, plus $600 for each eligible child. The payments are expected to hit the majority of taxpayers’ bank accounts in the next couple of weeks.
  • An extension of federal employment benefits of $300 a week, starting as soon as Dec. 27 and lasting for 11 weeks.
  • $82 billion for education, including more than $54 billion for public K-12 schools and nearly $23 billion for higher education. There’s also $10 billion for childcare assistance and $13 billion to extend food stamps.
  • $25 billion for emergency rental assistance and an extension of the CARES Act’s eviction moratorium.
  • Tax write-offs for business meals for corporations.

The new legislation also contained provisions for Paycheck Protection Program loans and Economic Injury Disaster Loan grants.

First, the new rules clarify that business owners can now write off expenses they used forgiven PPP loans to pay for. That overrides the previous IRS rule that businesses couldn’t claim deductions on costs — like wages and rent — if they used PPP funds.

You can learn more about the new PPP2 provisions here.

Second, there’s $284 billion for PPP2, with the requirement that 60% of a borrower’s loan go toward payroll expenses. There’s also $20 billion for EIDL grants for businesses in low-income communities.

The bill also improves the coordination between the Employee Retention Tax Credit and PPP2; businesses will have access to both programs without being allowed to double-dip. For the Employee Retention Tax Credit, there’s a 70% credit on up to $10,000 of wages for every employee every quarter.

There’s still a lot to unpack in the 5,000-plus page bill, so we’ll keep you updated as more unfolds. In the meantime, if you have questions, please reach out.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

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