• The act establishes a direct appropriation of $284.45 billion for additional employer loans under the Paycheck Protection Program (PPP), renewing the program established under the CARES Act. 
  • Employer-provided group insurance benefits, including group life, disability, vision and dental insurance, are includable payroll costs (applies to loans made before, on, or after the date of enactment, including the forgiveness of the loan). 
  • $600 checks will go to individuals with an adjusted gross income of up to $75,000 a year based on 2019.  Heads of households who earn up to $112,500 and a couple (or someone whose spouse died in 2020) who earns up to $150,000 would get twice that amount (the benefit declines for those who earned more than those income levels and cuts off entirely for individuals who earn more than $99,000).
  • Enhanced federal jobless benefits for individuals of up to $300 per week. Additional $100 per week to freelancers and independent contractors under the Pandemic Unemployment Assistance program.

Additional highlights in the bill for employers:

  • Under the Families First Coronavirus Response Act (FFCRA) components of the bill, mandated FFCRA Emergency Paid Sick Leave (EPSL) and Expanded Family and Medical Leave (EFMLA) Leave were not extended, and end on December 31, 2020. 
  • Covered employers (private employers with under 500 employees) may, however, continue to voluntarily provide emergency paid sick leave or emergency paid FMLA Leave under FFCRA and take the refundable payroll tax credit for the period of January 1 through March 31, 2021.  In other words, FFCRA leave is no longer required, but if covered employers voluntarily provide these leave benefits through March 31, 2021, they are eligible to take the tax credit for the leave. 
  • The two primary components of the FFCRA are the:
    • Emergency Family and Medical Leave Expansion Act (FMLA Expansion Act) which expands the list of qualifying leaves to employees who are unable to work or telework due to a school or childcare and
    • Emergency Paid Sick Leave Act (EPSLA). This requires employees receive paid sick leave for reasons related to COVID-19. Employers are responsible for administering this component of the Act.

PPP loan updates

Additional highlights in the bill for small businesses:

  • Creates a second round of PPP loans, called a “PPP second draw” loan for eligible smaller and harder hit businesses, with a maximum amount of $2 million. 
  • Defines eligibility for the PPP second draw for small businesses that have no more than 300 employees, have used or will use the full amount of their first PPP and demonstrate at least a 25% reduction in gross revenues between comparable quarters in 2019 vs 2020.  Businesses with multiple locations that are eligible entities under the initial PPP requirements may employ not more than 300 employees per physical location.
  • Eligible entities include businesses, certain non-profits, veterans’ organizations, and tribal businesses. Ineligible entities include publicly traded companies, businesses that were not in operation on February 15, 2020.
  • Establishes a maximum loan size of 2.5X average monthly payroll costs in the prior or calendar year, up to $2 million.  Seasonal employers may calculate their maximum loan amount based on a 12-week period from February 15, 2019 through February 15, 2020. 
  • PPP second draw loan borrowers would be eligible for loan forgiveness equal to the sum of their payroll and other covered costs and expenditures incurred during the covered period, in accordance with the 60/40 cost allocation rule between payroll and non-payroll costs.   
  • Includes set-asides to support first- and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers who have been made newly eligible, and second-time returning PPP borrowers.
  • Direct appropriation of $57 billion for the Microloan Program (loans up to $50,000) and enhances the program with both capital and technical assistance. Increases the term a borrower can repay its microloan from 6 to 8 years.
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