Lawmakers have provided an extension to the extra lifeline in the upcoming round of coronavirus stimulus for small businesses. Small businesses who had taken loans but have not yet been able to recover from the pandemic crisis are being offered a PPP tax break.
The Congress members have reached an agreement over the rescue package of $900 billion on 20th December, Sunday.
Relief For PPP Tax
According to the measure, Most of the adult US citizens and every child will be receiving a stimulus check of $600. Additionally, they will also be getting a weekly enhancement of $300 as jobless benefits.
The lawmakers have lined up a series of an endowment for the purpose of helping the small businesses.
Specifically, the Democrats have stated that they will allocate $284 billion towards forgivable loans. This will go through the program of Paycheck Protection which is stated by Nancy Pelosi, House Speaker, and Chuck Schumer, Minority Leader of the Senate in a joint announcement.
Lawmakers have further stated that they will be expanding the eligibility of PPP tax in order to include the local and non-profit newspapers, TV along radio broadcasters.
The PPP tax was established originally during the spring when the CARES Act was founded. In general, almost 5 million companies have received about $525 billion as loans for this program. Borrowers can be forgiven for the PPP loan by applying for 60% of the payroll proceeds.
There will be 1% interest for the amount which is not wiped. A maximum of $2 million can be drawn for the second time. The covered expenses are not deductible as said by the IRS and Treasury when speaking about the PPP tax.
This news of PPP loans being tax-free is definitely a relief for small businesses.