The United States Senate and House have reached an agreement on a $908 billion pandemic economic stimulus package. Also included in the agreement is a $1.4 trillion budget to fund the federal government through September 2021, and several tax extenders scheduled to expire at the end of 2020.
Provisions of the relief package include:
- Deductibility of PPP loan-related expenses. Under the Consolidated Appropriations Act, expenses paid with forgiven Paycheck Protection Program (PPP) loans are 100% tax deductible.
- A second round of Paycheck Protection Program (PPP) forgivable loans for qualified businesses. Loans will be capped at $2,000,000. PPP loans will be available for:
- First-time qualified borrowers and borrowers who received a previous loan but have fewer than 300 employees
- Borrowers who have used or will use the full amount of their first loan
- Businesses that can show a 25% gross revenue decline in any 2020 quarter compared with the similar quarter in 2019
- Simplified PPP loan forgiveness procedures for second draw PPP loans under $150K.
- Direct payments of $600 for individuals who makes less than $75,000, $1,200 to married couples earning under $150,000 a year, and a $600 payment for each child dependent.
- A $300 per week additional unemployment benefit, limited to a maximum of 11 weeks.
- Tax extenders for many expiring tax breaks, including those for people making charitable contributions.
- Business meals would be 100% deductible through 2022.
- 501c(6) eligibility for PPP funds.
We will provide further analysis of the pandemic stimulus package as the provisions are published and complete language of the Act is posted.
The Small Business Administration has ten days from the signing to provide guidance on the bill’s provisions. We will monitor developments as they are available.
The tax provisions in the bill, including the tax extenders, may require a conformity bill in Minnesota and other states to provide the same tax relief passed by Congress. We will provide updates as more information on state legislative responses becomes available.