The Paycheck Protection Program isn’t the only part of the $900 million stimulus bill that took effect Dec. 27. While many people know about the one-time $600 check for individuals, as well as the extra aid for schools, vaccination testing and personal protective equipment, here are a few other key provisions in the measure.
• Employee Retention Tax Credit: This credit against payroll taxes was around before but was mostly shunned because it couldn’t be used in conjunction with the PPP funds. That’s no longer true, but it still can’t be used for the same payroll expenses. It also has been greatly enhanced. It used to allow 50% of up to $10,000 over all quarters. Now it allows 70% of payroll per $10,000 over two quarters. That might make a huge difference — from about $5,000 to $14,000 per employee over two quarters. Employers do have to show a 20% drop in income for those quarters, but that’s less than the previous 50%.
The provision also allows businesses with up to 500 employees to apply.
Before the credit was limited to companies with under 100 employees.
• Economic Injury Disaster Loan advance: This grant program, replenished with another $40 billion, again offers $10,000 in direct Small Business Administration grants, but is now limited to businesses in low-income communities and may include many municipalities in New Hampshire. (The exact rules aren’t out yet.) To qualify, businesses can’t have more than 300 employees and have to show a 30% reduction in income for any eight weeks. In addition, none of the money has to be used for payroll and will not count toward a PPP loan. Like the PPP, both the expenses and the grant are tax deductible. Businesses must apply via the SBA website, not through a local bank or credit union.
The SBA still offers direct Economic Injury Disaster loan at 3.75% interest rate for 30 years until the end of the next year. That program was never discontinued.
• Shuttered Venue Operators Grant aka Save Our Stages: The legislation sets aside $15 billion for entertainment venues, money that’s intended to provide 45% of a venue’s gross revenue for 2019, if the money is spent on payroll (including some independent contractors), rent, mortgage and PPE. To qualify, a venue will have to show a 25% reduction in revenue. Those that received a previous PPP loan can pursue a Save our Stages loan, but won’t be able to apply for another PPP loan.
• Unemployment benefits: Many businesses — particularly in the hospitality industry — may not be able to stay open this winter if they don’t qualify for PPP or other assistance (and if they shut down, they are definitely not eligible during that time period). The law pays enhanced unemployment benefits to workers and business owners.
In addition, gig workers’ eligibility for unemployment has been extended, and the provision covers everything from a mom-and-pop shop with no employees, a subcontractor and an Uber driver to the business owner of a large company.
• Family leave and sick leave benefits: These were also extended, while the employee family and medical leave mandate and tax credit expired on Dec. 31. This is now the only way for the federal government, rather than the employer, to compensate workers who have to take time to care for someone or themselves.
• Rental assistance and eviction moratorium: The legislation extended the moratorium until the end of January, but President Biden has issued an executive order extending it through March.
• Rental assistance: This was not provided during the previous CARES Act directly, but New Hampshire set aside $35 million in CARES funds for rental assistance and utility bills. This new national $25 billion allocation would result in another $200 million going to the state earmarked for housing, help for the homeless, and for case management and educational efforts to keep people in their homes.
The legislation requires that money go directly to landlords and utilities not only for back rent and bills but for up to three months of upcoming rent at one time, capped at a year’s worth of assistance for Covid-related reasons. It also allows the money to go directly to the tenant if a landlord doesn’t cooperate.
— BOB SANDERS
