business COVID Stimulus Package Brings New Round of PPP Funding December 28, 2020 The President just signed another COVID relief bill. Check out what’s changed on the PPP front. Attention business owners: The President just signed a new COVID-19 relief bill due to continued challenges presented by the coronavirus pandemic. You’ll want to read up on how this will impact your Paycheck Protection Program (PPP) loans. We have the details here. Key PPP Provisions in the Proposed Bill: The new bill makes some key changes to the Paycheck Protection Program (PPP) introduced in the CARES Act earlier this year. Some key changes to the PPP are as follows – Deductibility of Expenses Forgiven under the PPP loan Program – The new bill now allows PPP borrowers to deduct expenses paid with PPP loans on their tax returns. Previously the IRS had published a ruling clarifying that the forgiveness of debt income was not taxable and therefore, any expenses paid with PPP funds and used to qualify for forgiveness were not tax deductible.Simplifying Loan Forgiveness for Loans under $150,000 – This change has been rumored for months now and will allow PPP borrowers with loans under $150,000 to have their loans forgiven via a simplified one-page application process.EIDL Advances – An unexpected provision in the bill no longer requires PPP borrowers who apply for forgiveness to subtract the EIDL advance they may have received from their loan forgiveness amount.PPP Round #2 – As expected the new relief bill establishes a second round of PPP loans. Here is a summary of PPP Round 2 (PPP2)$284 Billion in funding for PPP2 LoansEligibility 2nd time applicants – Small businesses with 300 or fewer employeesHave spent or will spend the full amount of their original PPP loanCan demonstrate a 25 percent revenue loss in any quarter of 2020 vs. the same quarter in 2019.Expanding PPP eligibility to small 501(c)(6) organizations that do not receive more than 15% of their revenues from lobbying activities and that have 300 employees or fewer, such as local chambers of commerce, economic development organizations, and tourism offices.Maximum loan amount reduced to $2 million dollars.Expanding forgivable expenses to include –PPE and other costs related to worker protection and facility modificationsExpenditures to suppliers that are essential at the time of purchaseCovered operating costs such as software and cloud computing services for business operations, human resources, and accounting.Hotels and Restaurants – Business with NAICS codes starting with 72 also qualify for larger loans under the new bill. Instead of being limited to 2.5 months of average monthly payroll costs, they will be eligible for loans up to 3.5 months their average monthly payroll costs (subject to the $2 million dollar loan limitation)More about the new bill The $908 billion relief bill addresses many more issues including unemployment benefits, business subsidies, stimulus checks, and much more. Questions on the proposed changes? We can help. Don’t forget to check out our PPP Headquarters where you can find all the latest information.