New COVID relief bill, Paycheck Protection Program passed congress on December 22. A second PPP Loan will be available. Here is a guidance you need to know.
Who is eligible for a second PPP loan?
Similar to the initial PPP loan, eligible small businesses may include:
Small businesses, Non-profit organizations, Sole proprietors, self-employed individuals or independent contractors
Addition to this, applicants must also meet the following
- Businesses were in operation prior to February 15, 2020.
- Businesses has a loss in revenue in 2020, which must be proved a 25 % or more reduction in gross receipts from any quarter in 2020 relative to the same quarter in 2019.
- Businesses may not have more than 300 employees.
- Businesses have used up or will use the full amount of their first PPP loan
SBA will provide further guidance such as application processes and required documentations. For the time being, let’s talk learn about any changes made and how those changes could affect you.
PPP Eligible expense list are added
- Operational expenses
Payments for software, cloud computing, accounting needs and other human resources
- Supplier costs
Expenditures any purchase order, or order for goods made prior to getting a PPP Loan essential to operate
- Property damage costs
Property damage costs due to public disturbances that occurred during 2020, which are not covered by insurance
- Worker protection expenses
Any personal protection equipment or property improvements and adaptive investments to help a borrower comply with COVID-19 related safety guidance during the period from March 1, 2020 onwards.
PPP expenses are tax deductible
Any expenses covered by a PPP loan can be claimed as tax deductible. The forgiven amount of PPP loans will not be included in taxable income.