On Dec. 27, 2020, President Donald Trump signed a new stimulus package into law. In addition to a $600 payment to eligible individuals, the new stimulus package includes numerous relief programs and tax incentives for businesses. Notably, the stimulus package has modified and made additions to the Paycheck Protection Program.
At the bottom of this article is a video put on by Scott Sternberg and Keith Naccari, of Sternberg, Naccari & White, going over newspaper media specific issues.
Here are some of the highlights of the new package in general:
Forgivable Expenses: The definition of forgivable expenses has been expanded to now include covered property damage costs, covered supplier costs, and covered worker protection expenditures.
Potential Larger First PPP Loan: For those who have not yet gone through the forgiveness process, you may be able to amend your first loan to maximize your initial PPP loan.
Second Round of PPP loans: Generally, businesses with no more than 300 employees may apply for a second draw of PPP loans. If the business meets the eligibility requirements, and it experienced at least a 25% decrease in revenue over a quarter in 2020 as compared to the same quarter of 2019. The maximum loan available in the second draw is $2,000,000.
Special Eligibility Requirements for Certain Industries: Please note special provisions and eligibility requirements exists for the Second Round of PPP Loans in certain industries such as hospitality and news organizations.
Increased PPP loan amounts for hospitality industry: Businesses whose NAICS code begins with 72 may apply for amounts equal to 3.5x average monthly payroll. Other businesses may apply for amounts at 2.5x average monthly payroll.
PPP expenses are now deductible: The new stimulus package clarifies that money and forgiveness received on PPP loans as well as EIDL advances is not taxable income. Additionally, the use of such funds shall not affect the deductibility of the expenses.
Net Operating Loss Carryback: Combined with the tax treatment of PPP, if you experienced a loss in 2020, 2019 or 2018 you may be able to amend your previous tax returns and carry that loss back. Consult with your tax professional to learn more.
Bonus point - Act soon: Revenues for the program may be limited, so you will want to contact your provider as soon as possible.
For any assistance or questions regarding the COVID Stimulus, Paycheck Protection Program or other stimulus related items, please contact your tax preparer and attorney, or contact our firm for a free consultation at email@example.com or firstname.lastname@example.org. You can find our helpful COVID resources at our website www.snw.law.