July 22, 2020
Sneak Peek: What’s inside next week’s stimulus package?
With COVID-19 unemployment relief set to expire in a week’s time, the pressure is on for Congress to pass a new stimulus package before the end of the month as coronavirus cases spike across the country.
Earlier this week, Senate Republicans and the Trump Administration reached a high-level agreement on major aspects of the next relief package. Gusto managed to get an early look into what the bill might include.
Note: These provisions are not in their final form and may not be until the bill is approved by Congress and signed into law by the president.
- Additional Paycheck Protection Program (PPP) funding, including “second checks” for PPP loan recipients with under 300 workers that can demonstrate 50% lost revenue, plus more generous loan calculations for farmers and ranchers.
- Expanded non-payroll cost forgiveness to include some supplier costs, operating expenses, and property damage caused by protests.
- Employer tax provisions, including an enhanced employee retention tax credit; deductions for employer spending on health and safety measures like testing, personal protective equipment (PPE), and other supplies; and increasing the business meal deduction from 50% to 100%.
- A liability shield for small business owners as well as a cap on damage awards.
- More flexibility for state and local governments in how they spend federal relief, but no additional aid as of now.
Meanwhile, here are a few hotly contended items that are still being worked out:
- Streamlined forgiveness for PPP loans under $150,000 and an intermediate forgiveness process for loans under $1 million. Banking and business advocacy groups continue to lobby for a simplified, one-page PPP forgiveness form for employers borrowing $150,000 or less, but others have raised concerns of “massive fraud.”
- A new working capital loan for businesses with under 300 workers that is an alternative to the second round of PPP funding they would be eligible for (you can only choose one).
The package is also set to include $105 billion in education funding, $25 billion for coronavirus testing, $1 billion for workplace training on social distancing, an extension of unemployment insurance that will cover roughly 70% of wages, and a renewal of the $1,200 stimulus checks for individuals who make up to $75,000 a year rather than a payroll tax cut.
How to maximize your PPP forgiveness
It may seem like a no-brainer to wait until your eight- or 24-week forgiveness window is up to apply for PPP loan forgiveness, but you don’t actually have to wait until your covered period is over to apply for forgiveness. In fact, it’s critical that you are strategic about when you apply. Read our breakdown of how to choose the right time to apply for forgiveness.
So you filed your taxes—well before last week’s deadline, mind you—only to discover that you didn’t receive all your tax documents before you filed. Or maybe you just made a mistake. No matter the scenario, we’ve got you covered.
Our partners at Bench put together this handy guide on how to amend your business tax return, without incurring any penalties or interest. Give it a read so you can make sure you’re square with Uncle Sam while keeping as much of your money in your pockets as possible.
Relaxed I-9 rules get an extension, and other headlines from this week
- I-9 compliance flexibility for remote onboarding has been extended through August 19. This means that business owners who recently hired new employees have an additional 30 days to review their identity and employment authorization documents in person. (National Law Review)
- A new bill would give reopening businesses a refundable payroll tax credit for 50% of the costs incurred due to new workplace safety guidelines, like increased testing, PPE purchases, extra cleaning, and reconfiguring work spaces. (Accounting Today)
- Without warning, LA businesses have been receiving $356 fines for posting signs that say they’re open. If they don’t pay in 30 days, the fine jumps to almost $1,200. (NBC)
- From paperwork mishaps to dodgy lenders to flat-out rejections, six minority and micro business owners share how the PPP failed them. (BuzzFeed News)
Top relief options for the week
- Business For All grants reward up to $50,000 to support business growth, including $10,000 emergency grants for small businesses in crisis. Grant applications are due on September 25.
- Iowa Economic Development Authority launched a new program with grants of up to $7,500 to help cover utility bill debt. Eligible businesses must have a physical location in Iowa with 50 or fewer employees. Applications will be accepted through August 21, or until funding is depleted, whichever comes first.
- Vermont Sole Proprietor Stabilization Program will provide grants of $5,000, $7,500, or $10,000 to qualifying sole proprietors through a lottery draw. Funds may only be used for working capital.
- Missouri Department of Economic Development announced a new program with up to $30 million in grants for small businesses. Applications will be accepted through August 31.
Want more small business news and resources? Check out past editions in our archive.