The U.S. Senate and House of Representatives overwhelmingly passed a $900 billion COVID Relief Bill yesterday. The Bill now goes to President Donald Trump, who is expected to sign it into law. Read below for the key highlights:
Business Update
- Business expenses paid using proceeds from PPP loans are tax-deductible.
Paycheck Protection Program Update
- A second round of PPP loans (PPP2) will be available for the “hardest-hit” small businesses. These include businesses who have less than 300 employees and who experienced a reduction of at least 25 percent of their revenue in the first, second, third, or fourth quarter of 2020. Businesses that previously received a PPP loan are eligible for PPP2 loans if they meet certain requirements.
- The PPP2 loans are calculated using the average monthly payroll costs (AMPC) paid during 2019 or within the 12-month period before the origination of the PPP2 loan.  In general, PPP2 loans will be equal to the AMPC multiplied by 2.5, for a maximum loan amount of $2 million. Restaurants and Food Service companies will qualify for loans equal to 3.5 times AMPC.
- The bill provides for flexibility on the spending of funds and a simplified loan forgiveness process for loans under $150,000.
- The SBA has 10 days from the day the legislation is signed into law to establish regulations on support for small businesses.
