PPP Update Jan 2021

The bottom line: PPP expenses are tax-deductible and the forgiveness process is easy.

Hello Bloom family!

We’re starting the year off right with some good news! 

After plenty of back and forth, Congress passed a second stimulus bill (The Consolidated Appropriations Act, 2021) that has been signed by the current president. Both small businesses and individuals will benefit from it (even if that individual stimulus payment isn’t what we were hoping for!).

Here’s what you need to know:


PPP Loan Forgiveness

What you need to know:

  1. Expenses paid for with PPP loans ARE deductible. This was not true in the first iteration of the bill, but will now help PPP recipients by granting more opportunities for deductions. 
  2. If your loan was for less than $150,000, the SBA simplified the forgiveness process into a one-page document.
  3. You will apply for forgiveness online through your PPP lending institution. Lenders are not currently accepting applications but will reopen them once the lenders have finished making the recent updates. 
  4. More information will be available on the SBA website and via your lender in the coming weeks. Remember, your forgiveness applications are due 12 months from when you received your loan.

If you want to know more, Forbes outlined other changes and advances in this article

Second Round of PPP Loans

You might qualify for another PPP loan

Businesses can apply for a 2nd round of PPP loans. To qualify, businesses must have fewer than 300 employees, have already used their first PPP loan, and show a 25% reduction in revenue from at least one quarter of 2020 to the same quarter in 2019.

Right now, we do not know what will be required to show a reduction in revenue. We will update you when it is known. 

If you are seeking a second PPP loan, you must contact your bank. Most banks do not have open online portals for second applications yet, but it will likely happen later this month. 

The second round will be forgivable and at least 60% of the loan must be used for payroll costs, including paying yourself. 

Finally, Congress increased the reimbursement to banks to loans that are less than $50,000. This gives lenders an incentive to prioritize small businesses during the application process. Therefore, it should be easier for small businesses to get funding this time around. 

EIDL Update

What you need to know

If you have questions surrounding your EIDL, I strongly recommend reading the material on the SBA website or contacting the SBA with any questions. 

If you took out an EIDL, be sure to keep strong records of how your loan is spent as you will have to provide this info to the SBA within 90 days of the loan being repaid. 

SBA staff members have been reaching out asking for additional documentation required by the loan. For example, you may be asked to prove that you have hazard insurance or payroll documents. 

Individual Stimulus

Calculate your stimulus

If you haven’t had your stimulus deposited already, you can calculate how much your family will receive here. To find your adjusted gross income on your 2019 tax return, you can look at the first page of your tax return. If we filed your taxes last year, your tax return will be in your Google Drive folder. 

Additionally, I’ve heard from a few of you that you did not receive the stimulus you expected. There seems to be a specific glitch with the additional $600 per child. If you did not get your first or second stimulus (in part or in full), we can include a recovery rebate credit on your 2020 tax return, permitting that you qualify for the stimulus. 

Is this the forgiveness application vibe?

Other Resources
If you would like more information regarding the changes and advancements to the stimulus programs, you can check out these websites:

If you have further questions regarding the PPP and loan forgiveness that are not answered on the SBA website or by your bank, please reach out to me! I’m always happy to help 🙂

Here’s to a solid start to 2021!

All my best,