COVID-19 Legislative update – As you may recall, Democrats proposed a $3 trillion stimulus proposal (the HEROES Act) which was countered by the Republicans $1.1 trillion proposal (the HEALS Act). When it became clear that the parties were at an impasse, the Republicans issued a new, $650 billion “skinny” relief bill that was sharply rejected by Democrats. The back and forth has created gridlock with respect to much needed economic stimulus.
As a result, a bipartisan group of House lawmakers, calling themselves the “Problem Solvers Caucus”, released a $1.5 trillion stimulus proposal to help negotiators bridge the gap between the parties.
What is in the bill?
Among the provisions in this proposal is one that would add a second, $240B round of PPP loans, allowing for flexible use, full transparency, simplified forgiveness, and prioritization for distressed businesses. It would also include $50B for targeted employee retention tax credits.
What’s not in the bill?
The latest proposal did not address the most pressing issues for current PPP borrowers – whether existing PPP loans will be tax-free or whether there will be simplified loan forgiveness for some subset of borrowers, e.g., for those loans under $150K or $350K. We suspect these provisions, if they are to be included at all, will likely require agreement on a larger bill than the one proposed by the Problems Solvers Caucus.
Progress on a new stimulus bill continues to be slow. We have seen several bills come and go, it is unclear how much traction this bill has but we will continue to track it closely and report to you if it gets legs.
Reminder Section – what should I be doing?:
- Talk to your lender to find out when its PPP loan forgiveness application portal will be ready.
- Talk to your Payroll Company about claiming the employer payroll tax deferral and employee retention credits (ERC) that were made available in the CARES Act
- Talk to your Payroll Company about claiming the qualified sick/family leave refundable tax credits (from FFCRA, passed prior to the CARES Act)
This information is provided by Withum. Visit Withum’s COVID-19 Resource Center for insights to help you and your business during this challenging time. Looking for more COVID-19 Funding Assistance Updates? Check out our News page.