COVID-19 Relief Bill Signed Into Law

Government building icon

Congress recently passed the Consolidated Appropriations Act, 2021. This tax, funding, and spending bill contains a nearly $900 billion COVID-19 aid package and includes another round of available Payroll Protection Program (PPP) funds. The emergency COVID-19 relief package aims to strengthen the economy, provide relief to small businesses and the unemployed, deliver stimulus checks to individuals, and provide funding for COVID-19 testing and the administration of vaccines.
For more information and assistance understanding the new bill, contact your advisor or a member of our team today. Highlights of the new legislation include:


Payroll Protection Program (PPP)

  • Deductions will be allowed for expenses funded with forgiven PPP loans
  • Economic Injury Disaster Loan advances up to $10k no longer count as an advance of PPP loan forgiveness and are exempt from taxation
  • Simplified forgiveness for loans under $150k
    • This will be a one-page certification/application, but is still yet to be published by the SBA, so we recommend holding off on applying for forgiveness if your loan is below this new threshold
  • PPP Round 2
    • A new round of PPP funds ($284 billion) was authorized to help provide relief to small businesses
      • Final rules are to be set within 10 days of the passage of the bill
      • Eligibility requirements for PPP2 include
        • Business must have fewer than 300 employees
        • Business must have seen a revenue reduction of at least 25% in any calendar quarter in 2020 (compared to the same quarter in 2019)
      • The maximum loan amount is capped at $2million
      • Eligible expenses for PPP2 (and original program) have been expanded
      • While 501(c)(3) organizations were eligible for the original round of PPP funds, 501(c)(6) organizations are now eligible to apply for the new round of PPP funds

Other Business-Related Stimulus Provisions

  • Employee Retention Credit
    • The credit rate is increased from 50% to 70% of qualified wages and the limit on per-employee wages is increased from $10,000 annually to $10,000 per quarter
    • Businesses with PPP loans are now eligible for the Employee Retention Credit
    • Credit period extended through June 30, 2021
  • Families First Coronavirus Response Act (FFCRA)
    • Payment of covered sick leave extended to March 31, 2021
  • Meals expense tax deduction increased from 50% to 100% for 2021 and 2022

Individual and Other Tax-Related Provisions

  • Stimulus Checks
    • A new round of $600 stimulus checks are available in full for those with adjusted gross income of $75K (single) and $150K (married, joint), including dependent children
    •  Checks are expected to phase out above these income levels
  • Unemployment
    • The bill provides an additional $300 per week for all workers receiving unemployment benefits, through March 14, 2021
    • The Pandemic Unemployment Assistance (PUA) program was also extended in this new legislation
  • Charitable Giving
    • Removal of income limits on cash gifts made in 2021
    • Increase in above the line charity deduction from $300 (2020) to $600 in 2021
  • Higher Education – Increased income limits for Lifetime Learning and American Opportunity Education credits

We will continue to provide additional guidance to you as it becomes available.

Please contact your advisor or a member of our team if you have any questions regarding your PPP loans, how to apply for the new round of PPP loans, and the impacts of this updated legislation.

Scroll to Top