Regulatory Updates

Regulatory Update: New COVID-19 Relief Bill Includes PPP Funding

Dec 23, 2020, 6:52 PM

(From NBOA) On Monday, December 21, 2020, the U.S. Senate and House of Representatives passed a new COVID-19 relief bill that that includes a new round of Payroll Protection Program loans (PPP2). These loans will be available to first time qualified borrowers, and businesses that received a PPP loan in 2020. Businesses that received a PPP loan previously and returned all or part of the loan are still eligible for PPP2.

As with PPP1, borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs with a maximum loan amount of $2M (with an exception for the Accommodation and Food Services sector, which has higher maximums). Similar parameters for forgiveness exist with PPP2 as with PPP1. No less than 60% of the funds should be spent on payroll over an eight- or 24-week period. Additional costs potentially eligible for forgiveness include the eligible costs from PPP1 (rent, covered mortgage interest, and utilities) as well as the following:

Covered worker protection and facility modification expenditures, including PPE, to comply with COVID-19 federal health and safety guidelines
Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations
Covered operating costs such as software and cloud computing services and accounting needs

On Tuesday, December 22, 2020, President Trump challenged the new COVID-19 relief bill. The President’s proposed amendments are expected to be presented to the house on Thursday, December 24, 2020.

Read the complete bill and article from Journal of Accountancy.