What’s in the second stimulus package

On December 27, 2020, President Trump singed into law pandemic relief bill that provide various benefits to individuals and small businesses impacted by the COVID-19 pandemic. Below are some of the main items included in the bill.

Stimulus Checks

The package includes $600 direct payments to individuals and $1,200 to married couples. Eligible families will receive an additional $600 per child.

Individuals with up to $75,000 in adjusted gross income in 2019 will receive that full payment, as will married couples making up to $150,000. Direct payments will phase-out for individuals with adjusted gross income over $75,000 and for married couples filing jointly with adjusted gross income over $150,000.

Second PPP Loans

The package includes second PPP loans to hardest-hit small businesses. The second loans will be limited to those with fewer than 300 employees that have seen drops of at least 25% of their revenue during the first, second or third quarter of 2020.

Application for second PPP are not open yet. The SBA will provide more details on eligibility and application process in the coming days.

Unemployment Benefits

The jobless will receive a $300 weekly federal enhancement in benefits through March 14. The amount is half of the earlier federal boost, which ran out at the end of July.

Simplified PPP Forgiveness Application

The Package creates a simplified application process for loans under $150,000 such that borrowers will receive forgiveness if they provide a lender with a one page certification that includes a description of the number of employees the borrower was able to retain because of the covered loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount.

The SBA has 24 days to establish this new simplified forgiveness application form.

Tax Treatment for PPP Loans

The Package specifies that forgiven PPP loans will not be included in taxable income. It also clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan. This same tax treatment also applies to EIDL grants and certain loans and loan repayment assistance.

More information can be found at the links below.