The American people, as well as US businesses, are breathing a huge sigh of “relief” as the latest, and long-awaited, $900 billion Coronavirus aid and stimulus bill has finally been approved…and just a few days before the end of 2020 and the expiration of several important elements of the relief from the CARES Act.
Dubbed Stimulus 2.0, this emergency economic relief package specifically impacts employers of small businesses with essential aid and childcare provisions critical to keeping the staff of companies across the country employed.
As was the case with the CARES Act’s launching of the Paycheck Protection Program (PPP), it will be essential for Employers to understand the nuances of this relief, and how to properly apply for loans and ultimately receive forgiveness for them.
Here is a summary of the emergency package, which contains many provisions that directly impact Employers:
Direct Economic Relief for Workers and Families
- Unemployment Insurance: This bill provides an additional $300 per week for all workers receiving unemployment benefits, through March 14, 2021.
- Payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent. This means a family of four will receive $2,400 in direct payments.
Small Businesses – Paycheck Protection Program (PPP) provides $284.5 billion to reopen and strengthen the PPP for first time and second time borrowers
- Tax deductibility of PPP loans expenses – retroactive to passage of the CARES Act and for the second round of PPP loans
- Develops a process for a small business to receive a second PPP if the small business has less than 300 employees and can demonstrate a revenue reduction of 25 percent; maximum loan amount for a second draw PPP will be reduced to $2 million
- Increases the PPP loan amount for NAICS 72 businesses (Accommodations and Food Service)
- Creates a simplified PPP loan forgiveness application for loans under $150,000 whereby the borrower signs and submits a one-page certification that requires the borrower to list the loan amount, the number of employees retained, and the estimated total amount of the loan spent on payroll costs
- Strengthens lender hold harmless provisions for lending institutions
- Expands list of eligible expenses to include covered operations (software, cloud computing, and other human resources and accounting needs); property damage costs due to public disturbances that occurred during 2020 that are not covered by insurance, covered supplier costs; and covered worker protection expenditures (PPE)
- Makes eligible 501(C)6s, destination marketing organizations (DMOs), housing cooperatives, newspapers, broadcasters, and radio stations
- Repeals the CARES Act provision that requires PPP borrowers to deduct their EIDL Advance from their PPP loan forgiveness amount
- Updates conflict of interest rules and prohibits publicly traded companies from PPP
- Provides a process for borrowers to request an increased loan amount if regulations were updated
- Codifies rules for faith-based organizations and churches to ensure eligibility remains intact
- Creates a farmer and rancher calculation
Transportation – $45 billion for keeping transit agencies running. This will allow those who must take transit—essential workers, seniors, low-income and communities of color—to get to work and access services.
Vaccines, Testing and Tracing, Community Health and Health Care Provider Support – $69 billion for vaccine procurement and distribution
Schools – $82 billion – critical funding for states, K-12 schools, and institutions of higher education that have all been significantly impacted by the coronavirus pandemic. Like the CARES Act the emergency education relief funds.
Rental Assistance – $25 billion – is the first-ever emergency federal rental assistance program to be distributed by state and local governments. These funds will be targeted to families impacted by COVID that are struggling to make the rent and may have past due rent compounding on itself.
Nutrition and Agriculture – $26 billion – to increase SNAP benefits by 15%, provide additional funding for food banks and senior nutrition programs, and to ensure college students have access to SNAP. This bill also dedicates $614 million for nutrition assistance for Puerto Rico and the territories, allocates emergency funds for school and daycare feeding.
US Postal Service – converts the CARES Act $10 billion loan into direct funding for USPS without requiring repayment. These funds will be used for operational costs and other expenses resulting from the COVID-19 pandemic.
Child Care – $10 billion – these funds maintain the flexibility given to states through the CARES Act and can be used to provide childcare assistance to families, and to help childcare providers cover their increased operating costs during the pandemic. This emergency relief will help stabilize the childcare market and allows states to expand childcare assistance to essential workers and working families who need childcare services.
Broadband – $7 billion in emergency funds for low-income families to access broadband through an FCC fund. Additionally, a tribal broadband fund, a telehealth fund and complete the broadband maps for the government to effectively disperse funds to the areas that need it most.
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