The long-awaited package passed before midnight, Monday, December 22. Many members of Congress agree that the package did not include every item each side wanted and there is a strong belief that a future package will come after the new president is sworn in.
Businesses and non-profits may find interest in a few of the items highlighted below.
$284 Billion for Paycheck Protection Program
PPP reopens for first and second forgivable PPP loans. Expanded eligibility includes nonprofits, media outlets, along with special accommodation for independent restaurants.
- PPP is open until March 31, 2021 or until funds are exhausted.
- Businesses that have received PPP or missed out on PPP in the initial round may apply.
- Second Round Draw Details
- Must have fewer than 300 employees
- Business must prove greater than 25% reduction in gross receipts during at least one quarter of 2020 versus the same quarter of 2019.
- Maximum amount of a PPP loan is $2 million.
- IRS will not tax businesses who received PPP as taxable income.
- Additional Categories for Permissible Expenses on PPP:
- Operations – software, cloud computing services, and other related expenses.
- Supplier Costs – goods essential to operation of business. Nonperishable items received before the loan received are only eligible, perishable items may have been purchased anytime.
- Worker Protections – expenses that go toward keeping employees safer during COVID-19, including personal protective equipment (PPE), drive-thru windows, sneeze guards and outside dining enclosures.
- Property Damage – costs related to riots or public disturbances that occurred in 2020 that were not covered by insurance.
- 60% payroll rule will continue to apply
- Meaning 60% of loan expenses MUST go toward payroll and the remaining 40% could go toward expenses such as rent, utilities, interest on mortgages, and the items listed above.
- Second Round Draw Details
$20 Billion for Economic Injury Disaster Loan (EIDL)
- EIDL Advance Grant will no longer act against PPP loan reception.
- Those who did not receive $10,000 EIDL Advance will be able to reapply for it
- If an applicant received EIDL Advance, but not the full $10,000 they may apply to receive the difference.
$15 Billion Dedicated to Independent Entertainment Venues
- Dedicated grants for live venues, independent movie theaters, and cultural institutions.
- These businesses are also eligible for PPP, but they cannot apply for both this grant and PPP.
Employee Retention Tax Credit
- The agreement extends and improves the Employee Retention Tax Credit to help keep workers in the jobs during coronavirus closures or reduced revenue.
- Employers can receive PPP and the Tax Credit if they ensure use is not for the same wage.
- Application for tax credit is extended to June 30, 2021
- Direct Payment Checks: establishes a new round of direct payments worth up to $600 per adult and child.
- Extension of Unemployment Benefits: unemployment benefits extend for another 11 weeks. This extension adds $300 per week for out of work employees.
- Rental Assistance: $25 billion in critically needed rental assistance for families struggling to stay in their homes and an extension of the eviction moratorium to January 31, 2020.
- Nutritional Assistance for Families in Need: $13 billion in increased SNAP and child nutrition benefits to help relieve the historic hunger crisis that has left up to 17 million children food insecure.
For a guide on the COVID-19 Federal Emergency Loans, click here.
Click here for a recording on a Small Business Update on the new stimulus bill from the U.S. Chamber.
To review a summary of the COVID-19 Relief Provisions in the new stimulus bill, click here.