After months of partisan wrangling, on December 20, 2020, Congressional negotiators finally agreed on a new $900 billion Covid relief package, which includes an additional $284 billion for the Paycheck Protection Program (PPP) for small businesses, created under the original Coronavirus Aid, Relief, and Economic Security Act (or CARES Act) in March.
This new package provides additional funding for those businesses that did not receive PPP money in the first round, especially minority- and women-owned businesses. In addition, it allows businesses a second chance at PPP money if they can show losses of 25% or higher in 2020 over their 2019 revenue.
The bill also addressed what was probably the biggest outstanding issue with PPP: the deductibility of expenses paid for with the forgivable loan. The Trump Administration position to date, largely led by Treasury Secretary Steven Mnuchin, was that businesses could not deduct the expenses paid for with PPP funds as they ordinarily would because the loan is forgivable and not taxable income.