The Lowdown on the New Payroll Protection Program.

On December 27, 2020 the U.S. Congress enacted the Taxpayer Certainty and Disaster Tax Relief Act of 2020.  The Act provided another round of Payroll Protection Program funding to any business with less than 300 people and whose gross receipts dropped 25% or more during any quarter of 2020 compared to 2019.  If your company was shut down during the second quarter of last year, it is likely your gross receipts dropped by 25% or more.  Don’t miss the opportunity to apply for the next round of PPP funding from local banks providing PPP loans.

The December 2020 Act also amended and extended the employee retention credit of the original CARES Act and allows eligible DPHA members to obtain both a PPP loan and claim an Employee Retention Credit for 2020, which was not possible under the original CARES Act.  The eligibility requirements to take the tax credit are complicated but do provide a tax credit of up to $5,000 per employee for compensation paid between March 12 and December 31, 2020, but only on wages where the business was shut down due to government order or experienced a large decline in year-over-year gross receipts.  There are lots of qualifying criteria necessary to take the tax credit.  Determining whether your company is eligible should be determined by a qualified tax professional.  Even if you don’t qualify for the tax credit, don’t miss out on the additional PPP loan opportunity!