The Internal Revenue Service (IRS) urges employers to take advantage of the newly-extended Employee Retention Credit (ERC), designed to make it easier for businesses that, despite challenges posed by COVID-19, choose to keep their employees on the payroll. The ERC is one of the more popular relief items for businesses and recent legislation has made it even more attractive.
The new round of Paycheck Protection Program (PPP2) loans is available to both new and second-time borrowers. Who gets the money and what are the rules?
The pandemic relief package (Consolidated Appropriations Act, 2021) gives a break to the hardest-hit small businesses by reopening the Paycheck Protection Program and offers them the ability to apply for a second loan. The new round of loans will be limited to those with fewer than 300 employees that have experienced drops of at least 25% in revenue during any quarter of 2020 compared with the same quarter in 2019.
On January 6, 2021, the IRS and Treasury Department issued guidance allowing deductions for the payments of eligible expenses when such payments would result, or be expected to result, in the forgiveness of a covered loan under the Paycheck Protection Program (PPP).