A Breakdown of the New COVID-19 Relief Package

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On December 27, 2020, a new COVID-19 relief package was signed into law. The package extends and expands many of the same programs established by the CARES Act. Below is a breakdown of some of the most important provisions for booksellers.

On Monday, January 11, 2021, the Paycheck Protection Program re-opened for community financial institutions to make first draw PPP loans and second draw loans starting today, January 13. PPP will be open to all participating lenders shortly. If you are interested in and eligible for either a first or second draw PPP loan and have not yet contacted a lender, contact them immediately about the steps you’ll need to take to apply. See the first draw borrower application and the second draw borrower application.

It’s unclear when the EIDL grant application will reopen.

For more detailed information than is laid out below, please contact ABA’s Advocacy Team at [email protected]. You can also access the bill text, a summary of the small business sections, and an easy-to-read fact sheet.

Paycheck Protection Program (PPP)
Economic Injury Disaster Loan (EIDL) and Grant
SBA Debt Relief
Tax Credits
Unemployment Benefits
Individual Relief Checks


Paycheck Protection Program (PPP)

  • General Program Rules

    • Reopens PPP through March 31, 2021, or until funding runs out (whichever comes first) and allocates $284 billion in funding.
    • Allows businesses to receive an initial PPP loan and increases the ability for PPP borrowers to request an increase in their existing loan amount due to updated regulations.
    • Maintains that businesses can receive a PPP loan in the amount of up to 2.5 times average monthly payroll costs, except in the case of businesses in the restaurant and hospitality industries that can receive loans of up to 3.5 average monthly payrolls costs.
    • Makes the following additional expenses forgivable

      • Operations expenditures;
      • Property damage cost;
      • Supplier costs; and
      • Worker protection expenditures.
    • Clarifies that in order to be eligible for a first or second draw PPP loan, a business must have been in operation on February 15, 2020.
  • Forgiveness Rules

    • Creates a simplified application process for loans under $150,000.
    • Repeals the requirement of deducting an EIDL grant from the PPP loan forgiveness amount. (PPP borrowers will no longer be penalized for receiving an EIDL grant.)
    • Clarifies that the 60/40 rule between payroll and non-payroll costs still applies for full forgiveness.
  • Second Draw PPP Loans

    • Allows smaller and harder-hit businesses to receive a second PPP loan.
    • Makes businesses eligible for a second PPP loan if they:

      • Employ 300 or fewer employees;
      • Have fully exhausted their first PPP loan; and
      • Demonstrate at least a 25 percent reduction in gross receipts in any quarter in 2020 compared to the same quarter in 2019.
  • Tax Provision

    • Clarifies that business expenses paid for with a forgiven PPP loan are tax deductible.

Economic Injury Disaster Loan (EIDL) and Grant

  • Extends the deadline to apply for the EIDL program, including EIDL grants, to December 31, 2021.
  • EIDL Grant Program Rules

    • Allocates $20 billion in funding for the EIDL grant and targets the grant to low-income communities.
    • Allows small businesses in low-income communities that already received an EIDL grant to receive additional funding, up to $10,000.
    • Provides $10,000 grants to eligible businesses in low-income communities that did not receive grants prior because funding ran out.
    • Makes businesses eligible to receive an EIDL grant if they:

      • Are located in a low-income community;
      • Employ 300 or fewer employees; and
      • Demonstrate at least a 30 percent reduction in gross receipts during an 8-week period between March 2, 2020, and December 31, 2021, compared to a similar 8-week period in 2019.
  • Tax Provision

    • Clarifies that EIDL grants are not taxable and that business expenses paid for with EIDL grants are tax deductible.

SBA Debt Relief

  • Extends debt relief on SBA loans under the CARES Act.
  • Provides three months of debt relief on pre-existing 7(a) loans and 504 loans from February through April 2021, and an additional five months of debt relief through September 2021 for SBA Community Advantage Loans, Microloans (and 7(a) and 504 loans in certain industries).
  • Provides six months of debt relief for new SBA loans issued between February 1, 2021, and September 30, 2021.

Tax Credits

  • Extends the refundable payroll tax credits for paid sick and family leave under Families First Coronavirus Response Act (FFCRA) through March 31, 2021 (but does not extend the requirement that businesses provide the leave).
  • Extends the Employee Retention Tax Credit through June 30, 2021.

    • Allows PPP borrowers to access the credit for wages not paid with forgiven PPP funds.
    • Makes businesses with 500 or fewer employees (was 100 employees) and new businesses that were not in existence for all or part of 2019 eligible for the credit.
    • Decreases the required year-over-year gross receipts decline from 50 percent to 20 percent.
    • Increases the tax credit rate from 50 percent to 70 percent of qualified wages.
    • Increases the per-employee limit from $10,000 per year to $10,000 per quarter.

Unemployment Benefits

  • Extends most additional federal unemployment from the FFCRA and CARES Act through March 14, 2021.
  • Increases the number of weeks of benefits an individual may claim additional unemployment benefits after previously collecting and exhausting state or federal unemployment to 24 weeks (was 13 weeks).
  • Extends unemployment benefits for gig workers, the self-employed, and others not generally eligible for unemployment benefits and increases the number of weeks of benefits to 50 weeks (was 39 weeks).
  • Provides an additional $300 per week in unemployment benefits (was $600 per week under the CARES Act).
  • Provides an additional $100 per week for workers who earn both wage and self-employment income but whose unemployment benefits does not include their self-employment income.

Individual Relief Checks

  • Provides $600 per eligible individual ($1,200 for married filing jointly) and $600 per qualifying child.
  • Expands eligibility to a married taxpayer filing jointly even when their spouse does not have a Social Security number.