City Of Batavia Provides Details On New Federal Stimulus Bill

Press release from the City of Batavia:

The federal government has approved $900 billion in coronavirus relief and a $1.4 trillion government spending bill that will provide funding for businesses and individuals impacted by the pandemic. Here are details regarding the stimulus bill:

Relief for Businesses-

• $284 billion in funding for the Paycheck Protection Program (PPP) to provide distressed small businesses with forgivable loans and keep workers employed
• The deadline to apply for PPP loans is March 31, 2021
• The loan forgiveness process has been simplified for loans of $150,000 or less
• Organizations with 300 or fewer employees that can demonstrate a revenue decline of at least 25% in any quarter in 2020 over the same quarter in 2019 can receive a second PPP loan of up to $2 million
• $35 billion of PPP funds are reserved for first time loan recipients
• Forgiven PPP loans will not be classified as income and tax deductions are now allowed for expenses paid with proceeds of forgiven PPP loans
• Additional eligible expenses (operations expenses, supplier costs) are included
• Allows for severely impacted organizations, based on revenue loss and employee count, to apply for a second PPP loan
• Ability to reapply if full $10,000 EIDL grant was not awarded

Economic Injury Disaster Loans (EIDL)

• Additional $20 billion added to the EIDL Program
• Loans provide eligible applicants with favorable 30-year loans accompanied by forgivable grants, as an advance, of up to $10,000
• Payments on these loans are deferred for a year
• Applicants must employ 500 or fewer employees and demonstrate a working capital loss due to COVID

Employee Retention Tax Credit (ERTC)

• Extends the refundable tax credit starting January 1, 2021 through July 1, 2021 and significantly expands access
• Increases the limit on per-employee creditable wages from $10,000 for the year to $10,000 for each quarter
• Increases the credit rate from 50 percent to 70 percent of qualified wages
• Expands eligibility by reducing the required year-over-year decline in gross receipts from 50 percent to 20 percent
• Allows for an organization to receive both a PPP loan and an ERTC
• Increases the 100-employee delineation for “large employers” for determining the relevant qualified wage base to employers with 500 or fewer employees
• Allows employers with 500 or fewer employees to advance the credit at any point during the quarter based on wages paid in the same quarter in a previous year
• Retroactive to the CARES Act, this bill would clarify that employers who received a PPP loan may still qualify for the ERTC with respect to wages that are not paid with forgiven PPP loans

Payroll Tax Deferral

• Employers that utilized the payroll tax deferral executive order issued in September would now have until the end of 2021 to pay back deferred taxes, rather than the end of April

Relief for Individuals-

Direct Payments

• Includes another round of stimulus checks of $600 for individuals who make up to $75,000 and $1,200 for couples who make up to $150,000, as well as an extra $600 per eligible dependent

Unemployment Insurance

• Extends federally enhanced unemployment benefits at $300 per week through March 14, 2021
• Extends the Pandemic Unemployment Assistance (PUA) program, which provides enhanced benefits to those self-employed, gig workers and others in non-traditional employment through March 14, 2021 and offers a phase-out to that program with three weeks of additional benefits

The bill also extended the timeline to spend money allocated to state and local governments through the CARES Act by one year to December 31, 2021.

Like the first PPP, you will apply for this PPP2 through your local banker.

New rules will be forthcoming from the US Small Business Administration within the next ten days. Follow or reach out to the Batavia Chamber of Commerce for updates and details!

Batavia Chamber of Commerce Website

This press release was produced by the City of Batavia. The views expressed here are the author’s own.