Now that the President has signed the Combined COVID-19 Relief and Omnibus Spending Bill, below are some of the highlights affecting local businesses:
The Act allocates $325 billion of relief to businesses and nonprofits, including $284 billion for another round of Paycheck Protection Program (PPP) loans.
Eligibility requirements for the “Second Draw” PPP for both first-time and repeat PPP borrowers include:
This time the following entities are excluded from eligibility: public companies (except news organizations), lobbying entities, entities with China-based ownership, and entertainment venue businesses who receive aid under a separate part of the Act.
Eligibility is expanded for non-profits and local newspapers, TV stations and radio stations, as well as trade and professional associations that operate as 501(c)(6) non-profits, with the following 501(c)(6) entities still excluded:
• organizations established for the purpose of promoting or participating in a political campaign – to be eligible to receive a covered loan if certain requirements are met.
There is also $20 billion included in the Act for targeted EIDL grants.
The maximum loan amount an eligible company can receive is the lesser of $2 million or 2.5 times the monthly payroll costs incurred during the one-year period before the loan is made, or during calendar year 2019. There is a small exception for (3.5 times the monthly payroll for the hotel and restaurant industries). The Bill still has the 60% payroll/40% non-payroll expense split that was in last year’s PPP law.
The new Act includes additional provisions to assist small and medium size businesses, which can also be applied retroactively to all PPP loans, including those taken under the March statute:
In addition to the PPP updates, the Act also modifies or extends employee retention tax credit, business meal deductions, and retirement plan distribution relief.
The Act also modifies the paid sick and family leave sections of the Families First Coronavirus Relief Act (“FFCRA”). The FFCRA required that employers with fewer than 500 employees provide mandatory paid sick and family leave to employees, and it also granted tax credits for employers who provided the paid leave, subject to certain income limits and caps. The paid leave provisions of the FFCRA were originally scheduled to expire on December 31, 2020. The Act states that eligible employers may, but are no longer required to, continue to provide paid sick and family leave, and continue to receive the associated tax credits, through March 31, 2021. In addition, the FFCRA’s paid leave provisions have been expanded to cover self-employed workers.
The Act also reinstates a $300 per week unemployment for anyone out of work because of the COVID as well as direct payments up to $600 per adult and child and extends the eligibility period through March 14, 2021. Claimants receiving benefits as of March 14, 2021 would continue to receive them through April 5, 2021 if they have not reached the weekly benefits maximum. In addition, the period of unemployment insurance benefits during for eligible claimants would increase from 39 weeks to 50 weeks.
Other provisions of the Act: