New COVID Relief Package Finalized
By Joe Nagel, Esq., LLM, CPA
On December 20, 2020, Congress finally agreed upon a new $900 billion COVID relief package. This new bill includes $284 billion for the Paycheck Protection Program (PPP) for small businesses which was created under the Coronavirus Aid, Relief and Economic Security (CARES) Act in March.
After much partisan debate and just five days before Christmas, Congressional negotiators agreed to provide additional funding for businesses that did not receive PPP money in the first round and to allow a second chance at receiving money for businesses that can show significant losses in 2020 over their 2019 revenue.
In addition, this bill addresses THE major outstanding issue for the business community which is that of deductibility of expenses paid for with the forgivable loan. As a result of this new Act, small business owners WILL be able to write-off expenses paid for with forgiven PPP loans, giving them a tax break that could amount to more than $100 billion. Once the full text of the bill is released, we will have greater insight into limitations included if any .
So what are the benefits to small businesses in addition to the tax fix?
- More money for businesses that received the first round of PPP funds but can show significant losses in 2020 over 2019
- Money for non-profits and news outlets that weren’t eligible in the first round
- $15 billion for live venues, independent movie theaters, and cultural institutions
- $20 billion for targeted grants through the Economic Injury Disaster Loan program through the Small Business Administration (SBA)
- Tax deductions for business meal expenses
- Funds for “very small” businesses and lending through community-based lenders like Community Development Financial Institutions (DDFIs) and Minority Depository Institutions (MDIs).
We will continue to monitor all updates to this legislation so please check back with us or call 404-255-7400 to discuss how these changes might impact your business.
