A new stimulus deal agreement has been reached in the Senate, and is expected to be passed by both the Senate and the House on Monday, December 21st. Many of the provisions mentioned on last Thursday’s episode of This Week This Morning are indeed in the agreement, although the final version of the bill has not yet been released as of the publishing of this blog entry. Anyway, let’s skip to what matters…what’s in the bill? Ahead of its release, we have reason to believe the new stimulus deal contains the following:
- Paycheck Protection Program (PPP) Round 2. Businesses with 300 or fewer employees who have experienced a 30% decline in gross receipts are eligible. The 30% decline refers to any calendar quarter in 2020 as compared to the same quarter in 2019. Businesses that were not in business during Q1-Q3 2019 can compare any quarter in 2020 to Q4 2019. And, if they weren’t in businesses until 2020, they could compare Q2 or Q3 to Q1 2020. In any case, the business must have been in business by February 15, 2020. Under the new stimulus deal, the loan amounts will be the same as Round 1 for the vast majority of borrowers, although they will be capped at $2M instead of $10M this time around. Also, businesses who did not participate in Round 1 will be able to participate under the previous requirements of the CARES Act.
- PPP expense deduction. The IRS had previously stated that expenses paid for by forgiven PPP loan proceeds are not deductible. Congress had bipartisan support to fight that revenue ruling as that was counter to their intention when passing the CARES Act.
- One-page Loan Forgiveness App for Round 1 PPP loans of $150K or less. Currently, there is a simplified loan forgiveness procedure for loans of less than $50K. Under the new Act, this same one-page forgiveness application applies to loans under $150K.
- Simplified loan forgiveness for Round 1 PPP loans between $150K – $2M. No supporting documentation will be required to be accompanied to the application for PPP loan forgiveness. However, the documentation should be retained in case of audit.
- New round of EIDL loans. These loans will be targeted for the businesses that were hardest hit by the coronavirus. The current understanding of the stimulus deal is that the business would need to have 25 or fewer employees and suffered an economic loss of 30 percent or greater. The amount of the loan would be $50,000 OR the amount of working capital needed in the 180-day period after loan funding, if that amount exceeds $50,000.
- Extension of paid sick leave tax credit created under the Families First Coronavirus Response Act (FFCRA).
- Stimulus checks of $600 per person in a tax household. This means $600 for each name listed on a tax return. That would be you, your spouse and your dependents.
- Additional Unemployment Insurance of $300/wk for 11 weeks, starting as early as December 27th. Additionally, the pandemic unemployment insurance programs would be extended alongside the additional benefits.
- Student loan deferment. Federal student loan payments will be deferred until April 1, 2020.
- Rental eviction moratorium extended until January 31, 2021. Additionally, there is funding being appropriated for financial assistance for housing expenses and food stamps.
Please reach out here to setup a consultation to see how we can help you receive the relief under the new stimulus deal that you or your business is eligible for.
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