Second COVID relief package clears Congress and offers more and significant small business relief
By CHRISTOPHER P. FINNEY | DECEMBER 21, 2020
Tonight, a second historic COVID relief bill passed both Houses of Congress and awaits signature by President Trump.
The bill provides significant supplemental relief for small business in addition to direct payments to individuals. Here are some highlights of the bill’s business provisions:
- Paycheck Protection Program funds distributed under the first relief bill this spring and summer already by law were not to be counted as income, but the IRS had ruled that businesses could not count their expenditure as deductions, which essentially reversed the “tax free” nature of the forgivable loans. Under this bill, for all businesses who received the PPP this spring or summer, Congress has clarified that the expenses are deductible, which results in a benefit of another 30% or more from the previously-granted funds for businesses that are profitable.
- A second round of PPP funding will be handed out, but this time it is limited to businesses with documentable and demonstrable downturn of 30% or more as a result of the COVID pandemic. Other tight conditions will apply. Thus, the pool of eligible borrowers (grantees) is far more limited than under the first PPP program. Amounts of the loans (grants) are not yet available.
- In a significant give and take for landlords, Congress extended the eviction moratorium until the end of January, but they added $25 billion in assistance to tenants in arrears on their rent, allowing landlords to make application for the funds. It is expected that the Biden administration will extend the moratorium further after he takes office January 20 of next year. The applications are allowed for tenants who meet eligibility requirements, including (i) earning less than 80% of median income, (ii) at least one person in their households has lost a job and (iii) are at risk of losing housing.
- Making meals and drinks for business entertainment of clients and customers 100% deductible.
The bill is 5,593 pages in length, meaning there remains a lot of dissection of its intricacies. Attorney Rebecca Heimlich of the Finney Law Firm will be leading another EmpowerU webinar in early January covering how businesses and individuals can fully take advantage of the deductions and subsidies the bill provides. We will announce that webinar shortly.
More on the bill is detailed here in today’s Wall Street Journal.
Advancing our objective of “Making a Difference” for our clients, Finney Law Firm has made a point of briefing the various COVID relief and legal developments for our clients throughout 2020, and that will continue on this blog into 2021. Stay tuned for updates.