Stimulus Update: $900 Billion COVID-19 relief Bill Passed & Signed
Sunday night, President Trump signed the stimulus bill, which is a roughly $900 billion COVID-19 economic relief package, delivering long-overdue assistance to businesses and individuals, in addition to funding the delivery of vaccines to the nation.
The bill provides a temporary increase to unemployment benefits, a stimulus payment available to most Americans, a new round of subsidies for hard-hit businesses, money for schools, and assistance for healthcare providers and renters facing eviction.
Here are some specifics within the bill:
- $284 billion for a new round of paycheck protection program loans (PPP2). The bill would target aid for businesses especially hard hit by closures, including nonprofits, restaurants, and live venues.
- $25 billion in rental assistance to pay for rent and utilities. The bill also extends an eviction moratorium through Jan. 31, 2021.
- $600 direct stimulus payments per qualifying adult and per dependent-child. This is half the amount of the March stimulus and is subject to the same Annual Gross Income (AGI) limits in which an individual’s payment begins to phase out after $75,000 or $150,000 AGI for those that are married, filing jointly.
- $300 per week unemployment insurance for out-of-work Americans for 11 weeks.
- $13 billion in enhanced Supplemental Nutrition Assistance Program (SNAP) benefits.
- $82 billion for colleges, universities, and schools.
- $10 billion for child care assistance.
- The COVID-19 aid bill also ends the practice of surprise medical billing.
- $16 billion in funding for coronavirus testing and vaccination development and distribution.
Similar to the first round of PPP loans, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. In addition, the following may potentially be forgivable under the PP2 terms:
- Worker personal protective equipment (PPE) and facility modification expenditures, to comply with COVID-19 federal health and safety guidelines.
- Supplier expenses that are essential at the time of purchase to the recipient’s current operations.
- Operating costs such as software and cloud computing services and accounting needs.
Identical to the first round of PPP loans, borrowers will be required to spend no less than 60% of the loan on payroll over a covered period of either 8 or 24 weeks for forgiveness eligibility. They may also receive a loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year. However, the maximum loan amount has been cut from $10 million to the previously mentioned $2 million maximum.
Another differentiation is that PPP borrowers with NAICS codes starting with 72 (hotels and restaurants) can qualify for up to 3.5 times their average monthly payroll costs, but also subject to the $2 million cap.
PPP2 loans will be available to first-time qualified borrowers and to businesses that previously received a loan from the first round of PPP funding.
For previous PPP recipients, businesses may apply for another loan of up to $2 million, provided they:
- Have 300 or fewer employees.
- Have already used or will be using the full amount of their first PPP loan.
- Can prove a 25% or greater revenue decline in any 2020 quarter compared with the same quarter in 2019.
First-time borrowers permitted to apply for PPP2 include:
- 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., provided they have 300 or fewer employees and do not receive more than 15% of receipts from lobbying.
- Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
- Sole proprietors, independent contractors, and eligible self-employed individuals.
- Not-for-profits, including churches.
- Accommodation and food services operations [those with North American Industry Classification System (NAICS) codes starting with 72] with fewer than 300 employees per physical location.
Borrowers that returned all or part of a previous PPP loan will be allowed to reapply for the maximum amount available to them.
If you have any questions or concerns, please feel free to contact us at [email protected] or (608) 356-7733 and as always we will continue to update you as we know more.