December 31, 2020

Latest COVID Relief Legislation

Dear EA Clients,

As many of you are aware, President Trump signed legislation this week that includes an additional round of COVID-related stimulus spending. Below is a high-level summary of the parts of the legislation that are most relevant to businesses and their employees.

We will be going into more detail on the legislation in a webinar on January 7th at 11:00am CDT. Please visit our COVID-19 Resources page to register for the webinar.

Updates to the Paycheck Protection Program (PPP)

  • Expands the list of expenses you are allowed to use PPP funds to cover.

  • Extends the deadline for applying for a PPP loan to March 31, 2021.

  • Establishes new rules that give additional help to various industries (farmers and ranchers, certain not-for-profits, TV and radio broadcasters, newspapers, restaurants, and hotels).

  • Clarifies that PPP loan forgiveness is not taxable and that the expenses covered by PPP funds are deductible.

  • Allows certain businesses that have been especially impacted by COVID to receive a second forgivable PPP loan.

  • Gives the borrower more flexibility in selecting the covered period—no longer tied to either 8 or 24 weeks.

Extension of Paid Sick Leave and Emergency Medical Leave Benefits

  • Allows employers, if they choose, to continue offering the paid sick leave and emergency medical leave that they offered in 2020 under the Families First Coronavirus Response Act (FFCRA) and receive tax credits to cover the cost of these benefits.

  • Does not grant any additional paid sick leave or family medical leave to employees that already used up the benefit in 2020.

Favorable Changes to the Employee Retention Credit (ERC)

  • Allows employers that have received a PPP loan to also be eligible for ERC.

  • Increases the amount of wages that can be counted for ERC.

  • Increases the per-employee wage cap that applies.

  • Decreases the amount of decline in gross receipts necessary to qualify for ERC.

  • Allows employers to use ERC on employees that are working, not just employees that aren’t working.

We look forward to discussing these changes with you in more detail during next week’s webinar.

Happy New Year!


The Employer Advantage Team