With the hopes of a second stimulus in the air for months, we are finally seeing progress.
Congress passed the $900 billion pandemic relief bill which will provide a second stimulus payment of $600 to individuals earning less than $75,000 and $1200 for couples filing jointly earning $150,000 or less. Families with children under the age of 17 may also be eligible for an additional $600 per dependent. The new stimulus payments are based on the 2019 tax returns.
We all have seen or experienced how overwhelmed the IRS is with the pandemic relief funds and stimulus. They are now saying people can begin to receive their stimulus in the mail as early as before the end of the year. Most payments however will be sent over the course of the next few weeks. The current deadline for sending out payments is Jan. 15th 2021. If the payments cannot be direct deposited or mailed by then, people will have to wait to get their money when they file their 2020 tax returns.
There were many glitches as this system began last year with the first stimulus sending payments to deceased individuals or foreign nationals who do not work or reside in the US. Despite those challenges and glitches, the IRS is confident in the new plans that are set in place for this next upcoming stimulus payment.
In addition, the new stimulus bill signed into law made two significant changes to the Paycheck Protection Program (PPP)—an additional round of program funding through second draw loans and an even further simplified forgiveness process for PPP loans under $150,000.
Many of the details around both of these programs are still being finalized by the Small Business Administration (SBA). Here’s what we know right now.
Further simplified forgiveness for loans under $150,000
If your original or second draw PPP loan is under $150,000, your forgiveness process has been simplified again.
The SBA has 24 days to provide us with the program details. We’ll let you know as soon as we have more information to share about the simplified loan forgiveness process.
For now, you should wait to submit your PPP loan forgiveness if you haven’t already submitted it.
Second draw loans
Second draw loans are designed to provide additional relief for small businesses that have been hit hardest by the COVID-19 pandemic.
Your business may qualify for a second PPP loan of up to 2.5 times your average monthly payroll costs in the one year prior to the loan. For businesses in Accommodations and Food Services industries (NAICS code 72), you may receive a loan of up to 3.5 times your average monthly payroll costs.
Full eligibility requirements can be found in the legislation<https://rules.hous
* Employing no more than 300 employees
* Using the full amount of your first PPP loan
* Being able to prove at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 compared to the same quarter in 2019
Eligible entities must be businesses, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives.
We encourage you to evaluate your eligibility and how much relief you may qualify for so that you’re ready to apply as soon as we’re ready to begin accepting second draw applications. Additional details will be coming soon.
The Kael Company Inc. is always here to help guide you through all the changes and updates. If The Kael Company, Inc. can help determine if you are qualified, and/or assist with the application process. Please reach out to us.
This article and content is based off of the article below. To read more about the upcoming stimulus payment, click the link below!
https://www.washingtonpost.com/business/2020/12/22/stimulus-payments-deadline/
