The New COVID-19 Relief Bill: What You Need To Know
A $900 billion COVID-19 relief bill was just passed by both the House and Senate on Monday, December 21st. Although the bill now has to be signed by President Donald Trump before going into law, we still wanted to provide the most significant points that would come out of the bill. Stay tuned for additional comments as the bill is over 5,000 pages long!
- The second round of PPP loans: open to those that did and did not receive funds from the first round. Second-time borrowers must:
- Have 300 or fewer employees
- Have used or will use the full amount of their first PPP loan
- Demonstrate a 25% reduction in gross receipts during a quarter in 2020 compared with the same quarter in 2019
- PPP loans will be based on 2.5 times average monthly payroll costs, the same as the first PPP round. Accommodation and food services industry businesses can take 3.5 times the average monthly payroll. The maximum loan amount is reduced from $10 million to $2 million.
- Forgivable expenses now include expenditures for personal protective equipment, essential supplier costs to the recipient’s current operations at the time of purchase, and covered operating costs such as software, cloud computing services, and accounting needs.
- Business expenses that were paid with forgiven PPP loan funds are now tax-deductible.
- EIDL advances are no longer required to be deducted from the PPP forgiveness amount.
- 100% deduction for meals (rather than the current 50%) from Dec. 31, 2020, to Dec. 31, 2022 for food and beverages provided by a restaurant.
- Provides $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year, as well as a $600 payment for each child dependent.
- Adds $300 to weekly unemployment benefits through March 14, 2021
- The threshold to deduct medical expenses is reduced from 10.5% to 7.5% of AGI
As of right now, the bill has not yet been approved by President Donald Trump but instead sent back to the Senate due to disagreements on the stimulus payment amount. We will send an update once the bill has been made into law.