A second stimulus proposal has been passed by Congress and is expected to be signed by the President which brings additional relief to small businesses of 300 employees or fewer that have seen at least a 25% drop in revenue in one quarter in 2020 over the same quarter in 2019. Businesses that received PPP loans previously are eligible for an additional loan if the conditions are met.
Loan Amount: a maximum of 2.5 times the average monthly payroll (capped at $2 million). Accommodation and food service industries are allowed a maximum of 3.5 times the average monthly payroll also capped at $2 million. An election can be made to use the 2019 average monthly payroll. Special rules apply for seasonal employers, farmers, and those not in operation for all of 2019.
Expenses: expanded expenses are eligible, including property damage costs, supplier and COVID-related preparedness costs and certain software. These expenses are also eligible costs for the first round of PPP loan funding that have not already been forgiven.
Streamlined Forgiveness Process: loans under $150,000 are eligible
Economic Injury Disaster Loan (EIDL): The new and existing PPP loans forgiven will not be reduced by any EIDL advance. Any EIDL advance is nontaxable.
Loan forgiven: The loan forgiven is not taxable. This applies to both rounds of PPP loans.
Expenses paid with PPP loan proceeds: Expenses paid with loan proceeds are deductible. This applies to both rounds of PPP loans.
For more information, please contact us at 401-831-0200.