On December 21, Congress voted to approve a second stimulus package for businesses and individuals adversely affected by the COVID-19 pandemic. President Trump subsequently signed the bill into law.
The $900 billion pandemic relief bill is the second largest federal stimulus after March’s Coronavirus Aid, Relief, and Economic Security (CARES Act). Along with extending several aid packages under the CARES Act that are set to expire on December 31, the legislation includes direct stimulus checks of $600 to individuals and enhanced unemployment benefits, as well as nearly $300 billion of Small Business Administration (SBA) funding for the Paycheck Protection Program (PPP), which had stopped taking loan applications in August.
Highlights of the stimulus package include the following:
Small Business Loans
The legislation provides $325 billion in aid to small businesses, including minority-owned businesses and nonprofits. The PPP program is being reopened with $284 billion in forgivable loans for small business borrowers, and also allowing certain distressed businesses to get a second loan. Of critical importance to many taxpayers, overriding the IRS, the legislation allows for the deductibility of expenses paid with PPP funds.
Businesses seeking additional PPP loans are advised to immediately prepare by gathering financial data to support their need for more funding. New PPP provisions include:
Additional small business measures include:
One-time $600 stimulus payments sent to individuals with incomes up to $75,000 based on 2019 income. The amount of payments will be reduced by $5 for every $100 of income above those thresholds, and will phase out entirely for individuals earning over $87,000.
Unemployed individuals will receive $300 per week in federal benefits for 11 weeks - through mid-March 2021.
K-12 schools and colleges will receive $82 million in relief aid, including assistance to help reopen classrooms safely.
$20 billion to make vaccines available at no charge and $9 billion for vaccine distribution.
Eviction protection has been extended from December 31, 2020 to January 31, 2021.
Legislators ultimately opposed $160 billion in funding to state and local governments. State and local government leaders will have an additional year to spend the funding provided under the CARES Act.
LGT's Profit Sense
Financial Tips from Your Trusted Advisor
Keeping you up to date with: