UPDATE: COVID-19 Relief Bill Passes House and Senate

UPDATE: COVID-19 Relief Bill Passes House and Senate

(This is an update to our previous notes on the bill, linked here)

On Monday night, December 21, 2020, Congress passed by an overwhelming majority the Consolidated Appropriations Act, which includes approximately $900 billion of relief to individuals, hard hit small businesses and other targeted organizations affected by the Coronavirus.  The core components of the bill were drafted based on the framework previously set in the Bipartisan COVID-19 Emergency Relief Act of 2020, a proposed relief bill set by a group of bipartisan lawmakers, announced just a little less than a week prior.

This newest round of COVID-19 relief will provide much needed assistance to the hardest hit small businesses, self-employed, non-profit, live entertainment and other “gig” workers who have endured months of government mandated shutdowns and restrictions.

For certain hard-hit small businesses, a second PPP draw will be allowed.  The maximum draw will be calculated in a similar method used in round one, except that the maximum draw will be $2 million and certain businesses, namely those identifying under NAICS 72 (Accommodation and Food Services), will be allowed to increase their draw to 3.5X average monthly wages, instead of the standard 2.5X.

Eligible hard hit businesses are generally defined as “any business concern, nonprofit organization, housing cooperative, veterans organization, Tribal business concern, eligible self-employed individual, sole proprietor, independent contractor, or small agricultural cooperative employing no more than 300 employees and, had gross receipts during the first, second, third, or, only with respect to an application submitted on or after January 1, 2021, fourth quarter in 2020 that demonstrate not less than a 25 percent reduction from the gross receipts of the entity during the same quarter in 2019.”

Lastly, the definition of qualified expenses allowable under the PPP was expanded to include operations expense, property damage, supplier costs and other worker protection expenses.

If you are looking for additional clarification of these latest changes, or tax planning assistance for you or your business, contact us for help with your financial and business accounting needs.