After months of negotiations, Congress has reached agreement on a new round of relief to help businesses and individuals struggling with the ongoing effects of the pandemic.

The House and Senate are set to vote later today on the Emergency COVID Relief Act of 2020, the second-largest economic rescue measure in U.S. history. The legislation is tied to a $1.4 trillion spending package to fund the government through 2021.

While the final text of the legislation is not yet available, Congressional leaders have released some details about the Act's numerous provisions, including the following that will be of particular interest to businesses and individuals:

Paycheck Protection Program (PPP) and Small Business Support

  • $284 billion to the Small Business Administration (SBA) for first and second forgivable PPP loans and $20 billion for Economic Injury Disaster Loans (EIDL)
  • New loans would be limited to businesses with 300 or fewer employees that have sustained a 30 percent revenue loss in any quarter of 2020
  • Small 501(c)(6) organizations will now be eligible for a PPP loan, although eligibility may be limited based upon the number of employees or the nature of lobbying activities
  • Simplified PPP loan forgiveness process for borrowers with loans of $150,000 or less
  • Forgivable expenses to now include supplier costs and investments in facility modifications and personal protective equipment to operate safely
  • Deductibility of business expenses paid for with PPP proceeds, in line with the original intent of the CARES Act. Eligibility may be limited to those businesses that saw some decrease in 2020 revenue, although we will not know more until the full text of the legislation is released.

Other Tax Assistance

  • Extension of a tax credit for employers that keep workers on the payroll
  • Deductions for business meals
  • Temporary extension of tax breaks for renewable energy

The legislation also includes a number of provisions designed to provide support for those who continue to struggle with the effects of the pandemic. Direct checks of $600 per individual and dependent (phased out for those making more than $75,000 per year) will be sent as early as next week. Enhanced unemployment benefits of $300 per week are authorized through March 14 for traditional employees as well as independent contractors and gig economy workers, and the base unemployment period will extend to 50 weeks. The federal eviction moratorium will be extended through January 31, and funds have been authorized for rental assistance. Finally, funds have been authorized for vaccine development and distribution, testing and tracing, and support for healthcare providers and schools.

The legislation does not include liability protections for employers or funding for state and local governments, two areas that represented the crux of Congress's months-long stalemate. Congress has signaled that it may revisit those issues when it resumes in the new year.

After the bill is approved by Congress, it will head to President Trump for his signature. The White House has signaled that the President is expected to sign it quickly.

With a looming government shutdown and a number of key relief provisions set to expire by year's end, the timing of this legislation was critical. Congress was determined to reach an agreement before its holiday break, and the news will no doubt come as a relief to the many Americans who continue to struggle through the ongoing pandemic.

To reiterate, the details above represent the information that Congressional leadership has informally provided to the media. We will not know the official details until the bill is signed into law and the full and final text of the legislation has been made public by Congress. We encourage you to avoid making any decisions until this information has been made available.

We will continue to monitor these developments and provide further information as it becomes available. As always, if you have any questions about these or any other matters, please contact your Kreischer Miller relationship professional or any member of our team. For additional PPP-related news and resources, visit our center for COVID-19 Business Resources.

Information contained in this alert should not be construed as the rendering of specific accounting, tax, or other advice. Material may become outdated and anyone using this should research and update to ensure accuracy. In no event will the publisher be liable for any damages, direct, indirect, or consequential, claimed to result from use of the material contained in this alert. Readers are encouraged to consult with their advisors before making any decisions.