A new pandemic relief bill was recently passed by the House and Senate and signed into law by the President on December 27, 2020. The $900 billion COVID-19 relief package was part of a $2.4 trillion Consolidated Appropriations Act bill signed by President Trump.
As a follow up to the CARES Act, which was the largest federal stimulus package, the new bill will help fund several expiring CARES Act aid programs to help individuals, businesses and schools. While the bill does not allocate aid for state and local governments or provide for business liability protections, Congress expressed that this is a starting point and future bills will be introduced.
The new package also extends the Paycheck Protection Program (PPP), expanding eligibility for local newspapers, broadcasters and not-for-profit organizations. The extension allocates another $20 billion to small business grants and $15 billion to live event and cultural venues.
Highlights of the next round of PPP loans:
- A second round of PPP loans are available for businesses that experienced 25% or more reduction of gross receipts in any 2020 calendar quarter compared to the same quarter of 2019. Companies with 300 or less employees will qualify.
- Expanded eligible non-payroll costs to include: worker protection equipment, supplier costs, property damage, operating expenses
- Similar to the first round, the loan amount will equal 2.5x average monthly payroll costs, except for the restaurant and hospitality industries, which can apply for 3.5x average monthly payroll costs
- Economic Injury Disaster Loan (EIDL) advances/grants are no longer subtracted from loan forgiveness amount and are no longer treated as taxable income
- PPP loans up to $150,000 will be forgiven with a new one-page form including the loan amount, number of employees retained and payroll percentage.