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On Dec. 27, 2020, President Trump signed the Consolidated Appropriations Act, 2021, an omnibus stimulus and budget act that includes the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (HHSB Act). The HHSB Act makes significant amendments to the CARES Act impacting the Paycheck Protection Program (PPP).
These changes establish a second-draw loan option for certain existing PPP borrowers who meet new size and revenue loss tests, and permit a supplemental draw on existing PPP loans for certain existing PPP borrowers who were unable to draw the maximum amount in their first PPP loan draw due to changes in rules or return of funds that could not be used at the time of the first draw.
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On December 27, 2020, the President signed into law the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, an integral portion of the Consolidated Appropriations Act of 2021 (the “Act”). As detailed in our Alert released on December 24, 2020, the Act includes the continuation and expansion of the Paycheck Protection Program (“PPP”), subject to certain eligibility requirements and borrowing restrictions. With respect to PPP matters, the Act has been enacted without modification to its initial proposed form.
In the coming weeks, we expect supplemental guidance and regulations in furtherance of the administration and implementation of the Act. The U.S. Small Business Administration is directed to issue regulations to effectuate the PPP-related provisions of Act within 10 days of its enactment.
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On December 27, President Trump signed the Economic Aid to Hard Hit Small Businesses, Nonprofits and Venues Act into law. It makes temporary changes to rules governing health and dependent care flexible spending accounts and allows employers who sponsor such plans to provide employees with more time to utilize these benefits.
Below is a summary of these temporary provisions.
Rollovers
For plan years ending in 2020, employers may permit participants to carry over any unused benefits or contributions remaining in the participant’s flexible spending account to the subsequent plan year without limitation. For example, if the plan year ends on December 31, 2020, the employer may permit participants to carry over any unused balance to December 31, 2021. Prior to the Act’s passage, carryover amounts were allowed only for health flexible spending account and were limited to $550.
Contributing authors: Diana Kim, Kaitlyn M. Baietto
Certain provisions of the Coronavirus/COVID-19 economic stimulus legislation are subject to the issuance of government regulations and other government action; thus, certain details regarding the legislation may be clarified or added.
On December 27, 2020, a new relief bill was passed into law intended to provide much-needed economic support to assist businesses in making it through this winter. The bill, known as the “Consolidated Appropriations Act, 2021” (Act), allocates over $284 billion in funding to the Small Business Administration (SBA)‒Business Loans Program Account, which covers several relief programs. One of the programs is the Paycheck Protection Program (PPP), which was first introduced under the CARES Act