December 21, 2020

Congress Reaches Agreement On COVID Relief Bill

Late in the afternoon on December 20, U.S. House and Senate lawmakers announced that they had reached a deal to pass a long-delayed fourth COVID-19 relief bill. Lawmakers in the U.S. House and Senate overwhelmingly approved the legislation about 24 hours later and President Donald Trump is expected to sign it into law on Tuesday, December 22.

According to an outline provided by House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Mitch McConnell (D-N.Y.), the legislation includes another round of small-business aid through the U.S. Small Business Administration’s (SBA) Paycheck Protection Program, $20 billion for grants to small businesses through the SBA’s Emergency Injury Disaster Loan program, a $300-per-week unemployment benefit for 11 weeks, $600 stimulus checks for most Americans, $25 billion in rental assistance, $22 billion would help states and local governments with COVID-19-related health expenses; $15 billion for theaters and other live venues, $82 billion for local schools, colleges and universities, $10 billion for child care, and additional funding for coronavirus testing, and vaccine distribution.

According to The Wall Street Journal, the bill also contains a provision that would guarantee PPP recipients can deduct the payroll costs and other expenses covered by forgiven loans, even though the loans themselves are tax-free income.

As a reminder, the Metals Service Center Institute joined more than 700 other organizations in December to send a letter to leaders in the U.S. House and Senate urging them to preserve the tax-free treatment of any forgiven PPP loan amount. As the letter argued, that treatment was consistent with the overall goal of the PPP, which was to give businesses the resources to keep workers employed during a time that their businesses were threatened by shutdowns and other responses to the pandemic.

Click here to read that letter again, and click here to read more from the S-Corp Association.