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COVID-19 Congressional Response R&R Partners, May 6, 2020
As Congress begins to contemplate what to include in the next relief bill, several senators from both sides of the aisle are thinking about changes to the Paycheck Protection Program (PPP). Some changes they’re evaluating include lengthening the time period in which small business must spend the money; include larger companies, and allow employers to spend the money on fixed costs like rent and utilities. House Speaker Pelosi has also previewed PPP adjustments she may seek in the next bill including extending the loan forgiveness period.
Today, four senators introduced a bipartisan bill that would allow forgiven loans under the PPP program to be tax-deductible. Finance
Chairman Chuck Grassley (R-Iowa); Small Business and Entrepreneurship Chairman Marco Rubio (R-Fla.); Finance Committee Ranking
Member Ron Wyden (D-Ore.); Sen. John Cornyn (R-Texas); and Sen. Tom Carper (D-Del.) are leading this effort on the Senate side.
Many lawmakers have said it was the intention of the CARES Act for PPP forgiven loans to be deductible as normal business expenses after the IRS issued guidance interpreting the law otherwise. The bill would clear up congressional intent and put it into law. It is not clear whether this bill could be rolled into the next relief package or pass on its own. A similar bill has been introduced by Rep. Lizzie Fletcher
(D-Texas) in the House.
CARES Act Implementation and Regulation Tracking
Our CARES Act Implementation and Regulation Tracker is linked here.
UI | The Department of Labor provided additional guidance to states’ unemployment insurance programs. Labor provided specific answers responding to states’ questions regarding reporting requirements for emergency administrative grants; modifications the
CARES Act made to emergency administrative grants; and answers to commonly asked questions about unemployment insurance.
PPP | The Trump administration has extended the deadline for companies to return PPP loans without penalty to May 14. Companies who had taken out loans via the program improperly originally had through May 7. Treasury updated the PPP FAQs to reflect this change.