Recent COVID-19 Relief Impacts to PPP, Other Loans, and Tax Credits

U.S. Insurance Solutions

Resources to help businesses navigate recent 2020 legislation

The new year brings additional COVID-19 relief as the Consolidated Appropriations Act, 2021 was signed into law on December 27, 2020. The legislation includes $900 billion in aid for businesses and individuals. This business provisions summary helps break it down, along with this simple chart to review the relief options available.

Key business provisions

Paycheck Protection Program (PPP) 

• More funds were received with application deadline extended to March 31, 2021.
• A new PPP Second Draw Loan program provides a second potentially forgivable loan up to $2M for smaller, harder hit businesses. Application deadline is March 31, 2021.
• New, eligible uses for PPP proceeds have been established, including money spent for personal protective equipment.
• Group life, disability, vision, and dental insurance costs can be included in calculating payroll costs. 

PPP loan forgiveness

• Eligible expenses are tax-deductible, even if paid from forgiven loan proceeds.
• A simplified forgiveness application is available for loans of $150K or less.
• A borrower can decide what covered period to use—anywhere from 8 to 24 weeks from the receipt of the loan.
• Economic Injury Disaster Loan (EIDL) Advance grants will no longer reduce how much of the PPP loan is forgivable. 

Other federal relief loans

• Additional funds are allocated for EIDL loans, and EIDL grants of $10,000 may be available for certain businesses. The application period is extended until the end of 2021.
• The maximum loan amount increased for SBA Express loans to $1 million for loans before October 1, 2021.
• An extension of the subsidies is provided for various SBA loan principal and interest payments. 

Extension of other benefits

• The employee retention tax credit is expanded and extended through June 30, 2021, and is now available even if the business received a PPP loan.
• Payroll tax relief is extended for those employers who deferred withholding of the employee share of Social Security. Repayment is not due until the end of 2021.
• The tax credit for Families First Coronavirus Response Act (FFCRA) paid sick and family leave is extended to March 31, 2021.