New Coronavirus Bill Shows Promise for Individuals and Small Businesses

On December 21, 2020, Congress passed H.R. 133, the Consolidated Appropriations Act (CAA), 2021, which includes:

Division N – Additional Coronavirus Response and Relief (ACRR)
Division EE – Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTR)

The bill passed with strong bipartisan support and is expected to be signed into law. Below is a summary of the most relevant provisions for individuals and small businesses.

Individual Economic Relief

$600 Stimulus Payments
Individuals earning up to $75,000 (or $150,000 for married couples) will receive $600, plus $600 for each child dependent.
$300 Weekly Unemployment Boost
Additional federal unemployment benefits are reinstated through March 14, 2021, with eligibility extended through April 5, 2021, and maximum weeks increased to 50 weeks.

Business Meals Deduction

To support the restaurant industry, businesses can now deduct 100% of restaurant meals (dine-in and takeout) for expenses incurred from January 1, 2021 through December 31, 2022.

Paycheck Protection Program (PPP) Updates

Second Round of Funding
Eligible businesses may apply for a second PPP loan of up to $2 million, provided they:
- Employ 300 or fewer employees per location
- Have used or will use their first PPP loan
- Experienced at least a 25% drop in gross receipts in any 2020 quarter compared to the same quarter in 2019
Special Rule for Hospitality and Food Services:
These businesses may borrow up to 3.5x average monthly payroll costs, still capped at $2 million.
PPP Expense Deductibility Clarified
PPP loan forgiveness is not taxable, and expenses paid with PPP funds are fully deductible, allowing for full tax benefits.
EIDL Advance Adjustment Repealed
PPP borrowers are no longer required to reduce their forgiveness amount by the EIDL advance they received.
Simplified Forgiveness for Loans Under $150,000
Borrowers can submit a simplified certification of eligibility and retain records for possible SBA review.
Expanded Eligible Expenses
In addition to payroll, rent, utilities, and mortgage interest, businesses can now use PPP funds for:
- Personal protective equipment (PPE) and facility modifications
- Supplier costs essential to operations
- Software and cloud-based services
- Accounting services

Grants for Shuttered Venue Operators

$15 billion is allocated for grants to eligible live venue operators, theaters, museums, promoters, and talent agents.

Must show 25% revenue reduction
Tiered distribution prioritizes applicants with the most significant revenue losses (90%+ or 70%+ revenue decline compared to 2019)

At least $2 billion is reserved for venues with fewer than 50 full-time employees.

Paid Leave Tax Credit Extensions

Employer Paid Sick and Family Leave Credits
Extended through March 31, 2021. Employers are not required to offer leave, but if they do, credits are available.
Self-Employed Leave Credits
May continue using 2019 earnings instead of 2020 to calculate credit amounts.
Payroll Tax Treatment
Qualified wages under this leave program are excluded from Social Security tax.

Deferred Payroll Tax Repayment Extension

Employers that postponed the 6.2% employee Social Security tax in 2020 now have until December 31, 2021 to repay it, with penalties and interest delayed until January 1, 2022.

Employee Retention Credit (ERC) Expansion

Changes apply to wages paid through June 30, 2021:

Credit rate increased from 50% to 70% of qualified wages
Per employee wage limit increased to $10,000 per quarter
Applies to employers with 500 or fewer employees
New employers that did not exist in 2019 may also qualify

Employers can now claim both PPP and ERC, subject to restrictions.

Unemployment Insurance Enhancements

Extended Pandemic Unemployment Assistance (PUA) through March 14, 2021
$300/week federal supplement reinstated
State reporting required to track individuals refusing to return to suitable work

If you have questions about how these provisions affect your business or individual situation, contact our office at 561-995-0064 for assistance.