Two bipartisan bills that were recently introduced on December 15, 2020 may in fact be finalized before 2021. Senator Joe Manchin (D-WV), among other senators, stated, “We’re not going home for Christmas until this gets done.” Many senators are on board that a new relief package must be passed so Americans receive the much needed and anticipated support before the end of the year. Senator Rob Portman (R-OH) asserted, “The Senate should not adjourn until we have passed a new COVID-19 package to provide the relief Americans need.”
Of the two bills introduced, the Bipartisan COVID-19 Emergency Relief Act of 2020 includes provisions related to small businesses and recipients of the PPP loan. According to the summary, if small businesses used the PPP proceeds to help pay for business expenses then the proceeds are specifically tax deductible. This tax treatment is consistent with the initial Congressional intent for the CARES Act. In addition, the bill expands the forgivable expenses to include supplier costs and investment facility modifications and personal protective equipment that was purchased in order to operate safely.
There is also a provision which provides $300 million to the Small Business Administration (SBA) to allow a second forgivable PPP loan to those small businesses that were hit the hardest. There are specific eligibility requirements that must be met in order to receive the loan. The second loan is limited to small businesses that have sustained a 30% revenue loss during any quarter in 2020. And the small businesses must have 300 or fewer employees. Further, if recipients receive or have received $150,000 or less in PPP loans, the loan forgiveness process will be simplified.
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