In $900B stimulus package, Congress unveils PPP Version 2, allows deductions for forgiven expenses
21 Dec 2020
The $900 billion, 5,593-page stimulus bill includes major benefits for PPP-eligible businesses.
A hard-hit business may obtain a second PPP loan, with a principal amount equal to the lesser of $2 million and 2.5-times average monthly payroll (measured during either the previous 12 months or calendar year 2019). To be eligible, a company must have sustained a 25% or greater drop in gross receipts for any completed quarter in 2020.
A borrower will receive forgiveness credit, during a 24-week period from the date of origination, for an expanded list of costs:
- Payroll costs
- Mortgage interest
- “Covered worker protection” – relating to CDC-recommended measures
- “Covered supplier cost” – an expenditure made by an entity to a supplier of goods for the supply of goods that— (A) are essential to the operations of the entity at the time at which the expenditure is
made; and (B) is made pursuant to a contract, order, or purchase order
- “Covered operations expenditures” – a payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses;
- “Covered property damage cost” – a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation
In addition, Congress overruled the IRS by providing a deduction for all expenses that are credited toward PPP forgiveness. Cavitch will continue to review the stimulus bill. Contact me at email@example.com for more information.Tags: Business Law