What
follows
is
a
summary
of
the
stimulus
relief
for
businesses,
which
is
part
of
the
Consolidated
Appropriations
Act,
2021
(H.R.
133)
signed
into
law
on
December
27,
2020.
Paycheck
Protection
Program
second
draw
Congress
has
created
a
PPP
second
draw
available
to
smaller
businesses
that
can
show
their
business
has
been
impacted
by
the
pandemic.
The
second
draw
offers
a
similar
package
to
the
PPP
offered
out
of
the Cares
Act
earlier
in
2020.
There
have
been
some
changes
and
limitations
put
in
place
for
the
second
draw
including:
-
Company
size
is
smaller.
Instead
of
500
or
less
employees
as
it
was
in
the
Cares
Act,
the
employee
limits
are
reduced
to
300.
-
Companies
will
have
to
show
a
25%
or
more
reduction
in
revenue
for
an
individual
quarter
in
2020
compared
to
2019.
This
requires
comparing
quarterly
----financials
for
each
quarter
of
2020
to
each
quarter
in
2019.
-
Businesses
that
have
20%
or
more
ownership
by
Individuals
or
other
entities
based
in
China
or
Hong
Kong
are
ineligible
for
the
PPP
second
draw.
-
Businesses
that
were
created
or
organized
in
China
or
Hong
Kong
or
have
significant
operations
in
those
countries
are
not
eligible.
-
Businesses
engaged
in
political
or
lobbying
activities
are
not
eligible.
This
includes
political
research,
political
advocacy
and
public
policy
strategy
companies
-
Additional
ineligible
businesses
include:
-
Life
insurance
companies
-
Lending
institutions
-
Passive
businesses
owned
by
developers
and
landlords
that
do
not
actively
use
or
occupy
the
assets
-
Businesses
located
outside
the
United
States
-
Pyramid
sale
distribution
businesses
-
Businesses
with
more
than
one-third
of
gross
revenue
from
gambling
-
Businesses
involved
in
a
federal
illegal
activity
-
Private
clubs
that
limit
membership
to
members
for
any
reason
other
than capacity
-
Government-owned
businesses
(does
not
include
businesses
controlled
by
a
Native
American
tribe)
-
Businesses
that
have
an
associate
that
is
incarcerated,
on
parole
or
probation,
or
has
been
indicted
for
a
felony
or
crime
or
moral
turpitude
-
Businesses
that
present
live
performances
that
are
sexual
in
nature
or
sell
products,
services
or
have
displays
that
are
sexual
in
nature
-
Businesses
that
have
defaulted
on
a
federal
loan
or
federally
assisted
financing
Calculation
of
loan:
The
loan
calculation
follows
the
same
rules
as
it
did
under
the
Cares
Act
with
the
exception
that
you
can
choose
to
use
payroll
amounts
from
the
calendar
year
2019
or
the
12
months
immediately
preceding
the
date
of
the
loan
application.
Hotels
and
restaurants
Borrowers
with
North
American
Industry
Classification
System
(NAICS)
codes
starting
with
72
(hotels
and
restaurants)
can
get
up
to
three
and
one-half
(3.5)
times
their
monthly
average
payroll
costs.
Deductibility
of
expenses
forgiven
under
the
PPP
and
PPP
second
draw
Under
original
guidance
from
the
Department
of
Treasury,
the
expenses
paid
with
funds
from
the
PPP
loans
were
not
deductible.
The
passing
of
this
new
bill
has
clarified
that
the
treatment
of
the
forgiveness
will
be
as
tax-exempt
income.
The
forgiveness
amount
will
not
add-back
the
forgiveness
as
income
or
result
in
any
reduction
in
expenses
paid.
PPP
simplified
forgiveness
application
A
simplified
application
(one-page)
will
be
released
for
loans
of
$150,000
or
less
in
the
coming
weeks.
We
will
provide
more
details
when
the
Department
of
Treasury
releases
the
new
application.
Tax
deduction
for
100
percent
of
business
meals
starting
January
1,
2021
Currently,
a
business
may
take
a
tax
deduction
of
50%
of
business
meals.
Starting
on
January
1,
2021
and
ending
on
December
31,
2022,
all
meals
from
restaurants
will
be
100%
tax
deductible.
Employee
Retention
Tax
Credit
extension
and
changes
Changes
have
been
made
to
the
Employee
Retention
Tax
Credit
including:
-
The
credit
is
now
allowed
for
wages
paid
through
June
30,
2021.
The
original
credit
was
due
to
expire
on
January
1,
2021.
-
The
credit
limit
of
$10,000
wages
per
employee
has
been
changed
to
$10,000
per
employee
per
quarter
for
2021.
-
The
credit
limitation
has
been
changed
from
50%
of
qualified
wages
to
70%
of
qualified
wages
in
2021.
-
The
gross
receipts
test
has
been
changed
to
comparing
the
respective
quarter
in
the
current
year.
-
The
credit
can
also
be
taken
if
the
payroll
for
the
Employee
Retention
Tax
Credit
was
not
paid
with
forgiven
(or
forgivable)
PPP
funds. The
payroll
cannot
be
used
for
both
the
PPP
Loan
forgiveness
application
AND
the
Employee
Retention
Tax
Credit. However,
if
payroll
is
large
enough
to
be
used
for
both,
it
is
allowed.
-
For
2020,
the
credit
calculation
has
not
changed,
only
that
it
can
be
taken
in
conjunction
with
the
PPP
from
the
above
bullet.
-
The
changes
to
this
tax
credit
are
retroactive
to
the
original
Cares
Act
date
of March
12,
2020.
Extension
of
Families
First
Coronavirus
Response
Act
sick
and
family
leave
The
FFCRA
sick
and
leave
pay
has
been
extended
for
qualified
employees
until
March
31,
2021.
The
original
Act
was
set
to
expire
on
December
31,
2020.
All
the
same
requirements
will
remain
in
place
with
the
exception
of
date
extension.
If
you
wish
to
discuss
any
of
these
topics
with
one
of
our
professionals,
please
contact
your
NMS
Accountant
or
one
of
our
offices.
NMS
-
Mentor
440-352-3949
NMS
-
Chardon
440-286-5222
NMS
-
Twinsburg
330-425-4422
NMS
-
Burton
440-834-9686
NMS
-
Middlefield
440-632-4370