Consolidated Appropriations Act: An Overview
Last night, Congress passed the Consolidated Appropriations Act, a massive bill that includes $900 billion in new COVID relief and $1.4 trillion to fund the federal government through the end of September of 2021.
The long-awaited measure, which President Trump is expected to sign into law in the coming days, includes targeted funding for individuals and businesses adversely affected by the ongoing pandemic.
Beyond the well-publicized direct cash payments to taxpayers and extended federal unemployment assistance, the bill includes a $284 billion in new Paycheck Protection Program loans with a number of new and modified provisions of particular interest to our clients. A sampling:
Tax deductibility for PPP expenses
In response to confusion surrounding IRS guidance about expense deductibility in the initial PPP program, the new bill specifies that business expenses paid with all forgiven PPP loans are tax-deductible.
Loans will be available to previous PPP loan recipients as well as first-time qualified borrowers. To qualify, prior recipients must have 300 or fewer employees, used the full amount of their first loans, and be able to show a 25% gross revenue decline in any 2020 quarter vs. prior year.
Forgivable loans will also be available to Sec. 501(c)(6) business leagues – chambers of commerce, visitors’ bureaus, etc. – as well as certain accommodation and food services operations with fewer than 300 employees per physical location.
More forgivable costs and expenses
Costs eligible for loan forgiveness will include certain COVID-related worker protection and facility modification expenditures as well as covered operating costs such as software and cloud computing services and accounting needs.
Simplified forgiveness application process
New loans of $150,000 or less will require only a simple one-page form for certification.
Keep in mind, that’s just an overview. We’ll be parsing the finished text of the bill and communicating further insights in the days and weeks to come. If you have any specific questions, please don’t hesitate to call or email your Weiss tax professional. In the meantime, like all Americans, we’re breathing a sigh of relief – pun definitely intended – that this 11th hour package has arrived just in time for Christmas!
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