The U.S. Senate and House of Representatives passed a $900 billion COVID-19 Pandemic Relief bill Monday night. We have not yet reviewed all 5,500 pages, but here is what we know so far:
- PPP round 2: $267.5 billion in PPP loan funds available through a similar process as round 1. Only businesses with 300 or fewer workers can qualify, down from 500 in round one; the business gross receipts must have declined by at least 25% in any quarter in 2020 compared with that same quarter in 2019, according to the new legislation. The amount will be based on 2.5 times a company’s average monthly payroll (based on either the 2019 calendar year or one year period ending before the date on which the loan is made) and the loan cannot exceed $2 million.
- Small business owners who receive PPP loans — whether last round or the next round — can deduct the expenses for which it used loan proceeds to pay
- $13.5 billion for Economic Injury Disaster Loans through the Small Business Administration.
- Employer credit for paid sick and family leave has been extended through March 31, 2021.
- The employee retention credit to apply to compensation paid to a covered employee has been extended through June 30, 2021.
- There will be a deduction for personal protective equipment and other supplies used to prevent the spread of COVID-19 for the above-the-line educator expense deduction.
- Federal unemployment benefits are extended at a rate of $300 per week for 11 weeks, to March 14, though eligible individuals can continue to receive benefits until April 5.
- Congress provided $25 billion for renters and extended the federal eviction moratorium for one month, through the end of January, as millions of Americans faced losing their home amid a pandemic.
- $600 stimulus checks — The direct payments phase out at a rate of 5% for single Americans with an annual income of $75,000 or more until it vanishes completely for those making $87,000. The income threshold is $112,000 for heads of households and $150,000 for married couples filing jointly. The payments cut out completely at $136,000 for heads of household and $198,000 for married couples. A family of four can expect to receive $2,400 under the bill and over 85% of households will get payments, according to the Washington Post.
- The “Business meal” deduction is back for 2021 and 2022 only, and the full amount is deductible.
- The bill is headed to the President’s desk and he is expected to sign it.
We will continue to comb through the bill for more details and items that may assist you. Please contact us if you have any questions or would like to discuss further.