Congress Approves New COVID-19 Relief Bill
Dear WANADA Members,
Late last night, Congress approved a $900 billion COVID-19 economic relief bill that contains several provisions important to our members. Crucially, the new law contains $287 billion in additional Paycheck Protection Program funding, and expands eligibility to additional organizations, including 501(c)(6) non-profits and religious institutions, though the maximum disbursement has been lowered from $10 million to $2 million.
We encourage you to read this great overview that the Journal of Accountancy put together about the relief bill. It goes into great detail about the differences between the first version of the PPP and this one.
You can also read a congressional summary of the key provisions at this link. In addition, The Washington Post has put together a nice overview that you can read here.
The relief package also makes expenses associated with previously-forgiven PPP loans tax-deductible, which is something that our friends at the National Automobile Dealers Association have been fighting for.
Under the terms of the bill, businesses with fewer than 300 employees, that have experienced revenue reductions of more than 25 percent in the last three quarters of 2020, may apply for additional PPP funding, even if they already received funds in first round of the program.
The bill also allows PPP participants to have more flexibility in spending their funds than they had in the first iteration of the program; we will provide you with additional guidance from the Treasury Department and the IRS when it is published. One aspect that we are awaiting more guidance on is how the new PPP rules impact a number of businesses with NAICS codes, particularly those who received funding in the first round of the program.
A separate support fund has been created for live entertainment venues, with loans available of up to $10 million. The legislation also includes an additional $20 billion to replenish the Economic Injury Disaster Loan program, while also eliminating the prior rule that forced EIDL recipients to deduct the amount of their advance from any PPP funds they may have attempted to have the government forgive.
The relief bill also includes direct stimulus payments of up to $600 for those who earned $75,000 in 2019 or less. It also provides at least 10 weeks of enhanced unemployment benefits of $300 per week, in additional to what an unemployed person receives from the state they last worked in.
The package also contains a provision allowing businesses to fully deduct the cost of work-related meals from their taxes, for at least the next two years. It also contains billions in funding for school safety measures, vaccine distribution, and a crucial expansion of the SNAP program, among other provisions.
Clearly the PPP component of the bill is of greatest interest to our members, and you can trust that, as we get additional guidance on the parameters of the program, and the Small Business Administration's timeline for re-opening applications, we will let you know about them right away.
If you have any questions, please feel free to contact me or Joe Koch (jk@wanada.org) at any time.
Sincerely,
John O'Donnell
WANADA President and CEO
