On December 27, 2020, the Consolidated Appropriations Act of 2021 was signed into law. Below, we’ve outlined some of the bill’s key provisions.
- Additional PPP “First Draw” Guidance
- Provides guidance on how to calculate the maximum First Draw PPP loan amount and what documentation needs to be provided.
- “Second Draw” of Paycheck Protection Program
- Provides for a “second draw” PPP loan which will be available to businesses that have 300 employees or fewer, have used or will use the full amount of their first PPP loan and have seen a reduction of greater than 25% in gross revenues.
- Biden Administration’s Inclusion of Additional Small Businesses for PPP
- These reforms target Minority-owned, women-owned, and other underserved small businesses to assist with these types of businesses that have been disproportionately harmed during the pandemic.
- Paycheck Protection Program Expense Deductibility Update
- Ensures tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans, as well as expenses for which a business received the EIDL Advance Grant.
- Simplified Forgiveness Application for PPP Loans Under $150,000
- Adds direction for a simplified application for Paycheck Protection Program (PPP) covered loans up to $150,000.
- New Round of Stimulus Checks
- Confirms the payment of $600 for each taxpayer ($1,200 if married filing jointly) and qualifying child.
- Employee Retention Credit Enhancements & Revisions
- Provides a refundable credit of payroll taxes of up to $5,000 per employee paid on qualified wages. Qualified wages are limited to $10,000 per employee annually for 2020. Qualified wages are limited to $10,000 per employee quarterly for 2021.
- Updated Guidance from the IRS on the 2020 Employer Retention Credit
- Additional PPP Guidance Issued by SBA on March 3, 2021
- Capital for Minority, Underserved, Veteran and Women-Owned Business Concerns
The SBA has released updated PPP loan forgiveness applications. They are linked below.
- PPP Loan Forgiveness Application Form 3508S (Revised January 19, 2021)
- For loans of $150,000 or less.
- PPP Loan Forgiveness Application Form 3508EZ (Revised January 19, 2021)
- For loans over $150,000 but without any employee/FTE reduction.
- PPP Loan Forgiveness Application Form 3508 (Revised January 19, 2021)
- For loans over $150,000 with reduced staff.
We will continue to update these resources as more guidance is released. If you have any questions, please reach out to your personal Sciarabba Walker contact or email us at email@example.com.