Retention Credit Update

As the President Trump signs the Consolidated Appropriations Act, 2021 (the “Act”), employers are expected to receive additional benefits from the employee retention tax credit enacted under the CARES Act. The credit was designed to provide a refundable tax credit for companies that continue paying their employees. Here are some of the highlights of the key changes included in the bill:

  • The Act extends the availability of the credit to companies who received PPP loans. The Act allows employers who received PPP loans to remain eligible for the employee retention credit with respect to wages that are not counted as forgiven payroll costs under the PPP.
  • The Act extends the availability of the credit to the first two quarters of 2021.
  • The amount of credit is 50% of the qualified wages paid to the employee, plus the cost to continue providing health benefits to the employee paid between March 12, 2020 and December 31, 2020. Effective January 1, 2021, the credit amount is increased to 70% of qualified wages, which is amended to include the cost to continue providing health benefits. Therefore, whereas the credit was capped at $5,000 ($10,000 in qualified wages X 50%), effective January 1, 2021, the credit cap is increased to $7,000 ($10,000 in qualified wages X 70%).
  • The Act lowers the bar on reduction in gross receipts from 50% reduction in gross receipts to 20% reduction.

PPP 업데이트

월요일 저녁, 미국 상원과 하원에서 Consolidated Appropriations Act, 2021이라는 이름의 코로나 판데믹을 극복하기 위한 법안을 통과시켰다. 총 9천억 달러 규모의 이 법안은 PPP 대출의 2차 라운드 및 PPP 관련 비용의 세무상 공제에 대한 내용을 포함하여 여러가지 경제 활성화를 위한 규정을 다루고 있다. 이 법안은 트럼프 대통령의 서명만을 남겨두고 있어 곧 입법화가 될 것으로 예상된다.

2 PPP

이 법안은 처음 대출하는 업체 및 기존에 PPP 대출을 받았던 업체에게 2차 PPP대출을 허용한다. 기존에 PPP를 받았던 업체들의 경우에는 직원의 숫자가 300명 미만이고, 1차 PPP대출에 받은 돈을 다 소진하였고, 2020년도 분기 중 한 분기가 2019년도 동분기 대비 25% 이상의 매출이 감소한 경우에 최대 2백만불까지의 2차 대출이 허용된다.

1차 PPP를 받지 않은 업체들의 경우에는 다음과 같은 요건을 충족하는 경우 2차 PPP 대출을 받을 수 있다:

  • 직원의 숫자가 500명 미만이고 다른 SBA 7(a) 대출을 받을 수 있는 업체
  • 개인사업자, 외부 용역자, 및 자영업자
  • 교회를 포함한 비영리 단체
  • 각 로케이션별로 직원의 숫자가 300명 미만인 음식 및 서비스 업체

1차 PPP와 마찬가지로 PPP대출의 금액은 전년도의 월 평균 급여의 2.5배로 산정되게 되지만, 최고 금액은 2백만불로 제한이 된다. 마찬가지로 상환금액을 탕감받기 위해서는 대출금의 60% 이상을 8주 혹은 24주의 기간안에 사용이 되어야 하며, 탕감을 받는데 고려되는 비용은 급여, 렌트, 모기지 이자비용, 및 유틸리티가 있다. 또한, 2차 PPP의 탕감에는 개인보호장비 구매 및 시설 변경 등 연방정부의 COVID-19 지침에 준수하기 위해 들어간 비용들도 포함이 될 것으로 보인다.

PPP 비용의 세무상 공제

이 법안이 통과되게 되면, PPP loan의 탕감신청을 하는데 고려되는 비용들도 세무상 공제가 되게 된다. 이 내용은 IRS가 앞서 발표하였던 PPP 관련 비용의 세무상 공제를 금지하는 규정을 대체하게 된다.

보다 간단해진 탕감 신청 기타

이 법안이 입법화 되게 되면 $150,000 미만의 PPP 대출의 탕감 신청이 보다 간단해 지게 된다. $150,000 미만의 PPP대출을 갖고 있는 업체들의 경우 관련된 대출금을 PPP의 목적에 맞게 사용하였다는 확인만 하면 탕감이 될 것으로 보인다.

또한, 기존에는 PPP 탕감시에 경제적 손실 재난 대출로 선급받은 금액 (EIDL Advance)은 제외 되었으나 이 법안은 이와 같은 제한을 폐지한다.

PPP Update: COVID-19 Relief Bill

Monday night, the U.S. Senate and House of Representatives passed Consolidated Appropriations Act, 2021 (the “Bill”). This $900 billion COVID-19 relief bill provides, among other things, second round of Paycheck Protection Program (“PPP”) loans and clarifies tax deductibility for PPP expenses. The Bill is on its way to President Trump, who is expected to sign it into law.

Second round of PPP Loans

The Bill provides second round of PPP(“PPP2”). PPP2 loans are available to first-time qualified borrowers and to businesses that previously received a PPP loan. Previous PPP recipients may apply for another loan of up to $2 million, provided they have 300 or fewer employees, have used or will use the full amount of their first PPP loan, and can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

Second round of PPP loans are available to following first-time borrowers from the following groups:

  • businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
  • Sole proprietors, independent contractors, and eligible self-employed individuals.
  • Not-for-profits, including churches.
  • Accommodation and food services operations (those with NAICS codes starting with 72) with fewer than 300 employees per physical location.

As with PPP1, borrowers may receive a loan amount up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, but the maximum loan amount has been limited to $2 million.

To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks — the same parameters PPP1 had when it stopped accepting applications in August. The costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. PPP2 also makes the following potentially forgivable:

  • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
  • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
  • Covered operating costs such as software and cloud computing services and accounting needs.

Tax Deductibility of PPP Expenses

The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible. This supersedes IRS guidance released earlier in 2020 that such expenses could not be deducted.

Simplified Application and Other Terms of Note

The Bill creates a simplified forgiveness application process for loans of $150,000 or less. These borrowers will receive forgiveness upon submission of one-page certification form to be developed by the SBA.

The Bill also repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount.