The COVID-19 relief bill being debated since July in Congress was finally signed into law on December 27, 2020, as part of a broader Consolidated Appropriations Act, 2021. The new relief package ($900 billion) is intended to extend and modify certain provisions in the CARES Act ($2.2 trillion) enacted in March 2020. Together with the provisions in the CARES Act, this relief package is the largest provided by the US government in its history (e.g., the fiscal stimulus for the 2008 financial crisis was $700 billion) and is aimed largely at assisting US businesses and workers still suffering from the COVID-19 led economic hardship. The relief package is expected to stimulate the US economy during the first half of 2021.
Among various provisions included in the new legislation, perhaps the most beneficial to many small and mid-sized businesses are the availability of second draw Paycheck Protection Program (PPP) loans and the extension and expansion of the Employee Retention Credit (ERC.) PPP recipients are now able to receive the ERC, which certainly gives the much-needed financial relief. This document provides an overview of updates to the PPP and ERC based on the information available as of the day this document was prepared. Since the Treasury, the SBA, and the IRS are expected to issue additional guidance and FAQs in the future, please refer to the latest information when applying for these programs. If you have any questions, please contact an HLS professional.