The U.S. Senate and House of Representatives overwhelmingly passed a $900 billion COVID-19 relief bill Monday night. The measure now goes to President Trump, who was expected to sign it into law but has now threatened not to as he wants more direct stimulus to the American people. We’ll see how this plays out.
The key provisions of the “Consolidated Appropriations Act, 2021” bill that directly affect our client base are outlined below. There are many additional provisions which can be found here: Journal of Accountancy
$284 billion for forgivable Paycheck Protection Program round 2 loans
- To qualify, a business must have 300 or fewer employees, have or will fully use their first PPP loan and can show a 25% gross revenue decline in any 2020 quarter compared to the same quarter in 2019
- Borrowers may receive a loan amount up to 2.5 times their average monthly payroll costs in 2019, the same as round 1
- Borrowers with NAICS codes starting with 72 (hotels and restaurants) can get up to 3.5 times their average monthly payroll costs
Deductibility of PPP expenses
- The forgiveness is tax free and the expenses paid with the loan are deductible
Simplified PPP forgiveness for loans under $150,000
- Borrowers shall receive forgiveness by signing a 1 page form listing number of employees retained, amount spent on payroll and total loan amount
Repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount
- The full loan is now forgivable even if your business received the $1,000 to $10,000 EIDL Advance Grant
Temporary reinstatement of the full meals deduction
- Allows a 100% business expense deduction for meals (rather than the current 50%) as long as the expense is for food or beverages provided by a restaurant
- This provision is effective for expenses incurred after Dec. 31, 2020, and expires at the end of 2022
$166 billion for round 2 direct stimulus checks
- $600 for individuals making $75,000 or less per year
- $1,200 for married couples making $150,000 or less per year
- $600 for each child dependent
$120 billion in extended unemployment benefits
- Provides workers receiving unemployment benefits a $300 per week supplement from Dec. 26 until March 14, 2021
Your Crown Personal CFO team will work with you individually to ensure we take advantage of any opportunity created by the new stimulus. If you have any immediate questions, please don’t hesitate to reach out directly.
Wishing you and your families a happy holiday season!