As Senate leaders continue to progress towards passing a new stimulus package, many business owners and individuals are anxious to learn how a potential deal may support them through the ongoing COVID-19 pandemic. HBK CPAs and Consultants is following these negotiations and will provide details if legislation is signed into law.
Proposed changes to the Paycheck Protection Program (PPP) include:
- Clarification of the tax treatment of forgiven PPP loans allowing a deduction for business expenses paid with PPP loan proceeds, and used to substantiate forgiveness. *Note that as these changes are not final, PPP loan borrowers should still plan for the possibility that expenses paid with PPP loan proceeds and used to substantiate forgiveness will not be deductible.
- A new round of PPP loans for eligible borrowers. Congress may target smaller businesses impacted by COVID-19, which means that new eligibility criteria may be used. Interested borrowers will need to reconsider whether they are eligible for the next round of loan funding.
- Simplified forgiveness application processes for certain borrowers.
Other stimulus discussions include:
- Direct stimulus payments of $600 to eligible individuals
- The renewal of certain unemployment benefits
- Other support for COVID-19 protection and prevention programs, such as funds for vaccine development and testing
Congress has indicated negotiations may continue into the weekend. Therefore, these changes are not yet law, and those using current stimulus funds, whether through the PPP program or other COVID-19 relief funds, should continue following the rules that are available.
For legislative updates, visit www.hbkcpa.com/covid19 or contact your HBK Advisor.