The U.S. Senate and House of Representatives overwhelmingly passed the Consolidated Appropriations Act, 2021, a COVID- 19 relief bill on Monday, December 21, 2020, and President Trump signed the bill into law on Sunday, December 27, 2020. The relief bill is comprised of $600 stimulus payments to individuals, adds $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses.

In a nutshell, the legislation provides:

  • Tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans
  • Additional PPP funding
  • Eligibility for Sec. 501(c)(6) nonprofit organizations to obtain loans
  • The opportunity for businesses facing severe revenue reductions the opportunity to apply for a second loan 

 Key financial provisions in the bill include:

  • $325 billion in aid for small businesses struggling after nine months of pandemic-induced economic hardships
  • $166 billion for economic impact payments of $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year, as well as a $600 payment for each child dependent
  • $120 billion to provide workers receiving unemployment benefits a $300 per week supplement from December 26 until March 14, 2021
  • $25 billion in emergency rental aid and an extension of the national eviction moratorium through January 31, 2021
  • $45 billion in transportation funding
  • $82 billion in funding for colleges and schools
  • $22 billion for health-related expenses incurred by state, local, Tribal, and territorial governments
  • $13 billion for emergency food assistance
  • $7 billion for broadband expansion

There are new PPP provisions in the Act:

The newest version of the Paycheck Protection Plan, nicknamed “PPP2,” has characteristics in common with the original PPP process but also offers some substantial differences, such as who is eligible to apply, the terms of the loan and forgiveness eligibility, an application that is easier for the borrower to complete, and tax deductibility of business expenses paid with forgiven PPP loans.

We look forward to helping you leverage the latest opportunities with this law.