COVID 19 Update 4/27/2021


MN Taxation of PPP

Currently, the proposals for treatment of PPP tax forgiveness from the Minnesota House and Senate are different.  The Senate tax bill provides full forgiveness on all PPP loans of any amount, while the House caps the forgiveness at $350,000 per loan.  So, there would be tax liability on any PPP loan amounts over $350,000 under the House proposal and no liability under the Senate proposal.

The difference between the House and Senate provisions will be worked out in Conference Committee as the Session comes to a close.  We’ll keep you posted. 


Tax Credits for Vaccine PTO

Last week, President Biden announced tax credits for certain businesses that pay employees who take time off to get COVID-19 shots, a new effort to involve corporate America in his vaccination campaign.

"I'm calling on every employer, large and small, in every state to give employees the time off they need with pay to get vaccinated," the Democratic president said.

The tax credits, provided for by the American Rescue Plan, apply to businesses with fewer than 500 employees and enable employees to get vaccinated and recover from after-effects of vaccination, among other purposes.  For additional information, please consult this snapshot from the Department of the Treasury.


PPP Extended

In case you missed it, on March 30, President Biden signed into law the two-month extension to apply for a Paycheck Protection Program (PPP) loan. As a refresher, the legislation extends PPP through May 31, allowing businesses more time to pursue a second PPP loan. Further, if eligible organizations apply by May 31, the Small Business Administration will permit lenders an additional 30 days to process and approve any outstanding applications.

Eligibility criteria for a second PPP loan are as follows:

  • The applicant received a first PPP loan and will or has used the loan only for authorized uses;
  • The applicant employs no more than 300 people; and
  • The applicant can demonstrate at least a 25-percent reduction in gross receipts between comparable quarters in 2019 and 2020.

The maximum loan amount of a second PPP loan is two-and-a-half times the average monthly 2019 or 2020 payroll costs, up to $2 million.


New EIDL Loans Announced

The U.S. Small Business Administration launched a new round of Economic Injury Disaster Loan (EIDL) assistance – called Supplemental Targeted Advances – on April 22, 2021 that will provide $5 billion in additional assistance to 1 million small businesses and nonprofit organizations that have been most severely affected by the economic effects of the COVID-19 pandemic. The Supplemental Targeted Advance program is the latest SBA relief program to launch as part of the American Rescue Plan Act on March 11, 2021.

Businesses must meet all of the following eligibility criteria:

  • Is located in a low-income community. Use this mapping tool to see if your business is in a low-income community as defined in section 45D(e) of the Internal Revenue Code. The business address must be in a low-income community to qualify, so SBA encourages you to check the map before you apply; and
  • Can prove more than a 50% economic loss during an eight-week period beginning on March 2, 2020, or later, compared to the same period of the previous year. Applicants need to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) from January 2019 to the current month-to-date; and
  • Has 10 or fewer employees. This includes sole proprietors, independent contractors, private nonprofit organizations, and others that usually qualify for the EIDL program. However, agricultural businesses, such as farmers and ranchers, are not eligible for the Supplemental Targeted Advance. Farmers and ranchers may still apply for loan assistance through the COVID-19 EIDL program.

This additional relief to the smallest and hardest hit businesses builds on Administrator Guzman’s April 6 action to significantly increase the maximum loan amounts for COVID-19 EIDL assistance from 6 months of working capital with a maximum of $150,000 up to 24 months of working capital and a maximum of $500,000. SBA also announced on March 12 that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022 to provide more time for businesses to build back.

Effective April 22, the SBA modified the Targeted EIDL Advance application process to determine if businesses also qualify for the additional $5,000 Supplemental Targeted Advance.  SBA will contact eligible business entities to apply and applications will be processed on a first-come, first-served basis. To qualify for the Supplemental Targeted Advance, an eligible business entity must be in a low-income community, suffered greater than 50 percent economic loss, and have 10 or fewer employees.

For details about the Targeted EIDL Advance and Supplemental Targeted Advance program, please click here.


Hope to See You on May 20th!

After what has been a long and lonely year dealing with COVID-related disruption, we look forward to bringing the industry back together for the AASP-MN Leadership Conference.  Safety protocols will be in place so everyone can feel comfortable attending.

We have two great, nationally-recognized keynote speakers, roundtable discussions/workshop on ADAS and the always-popular happy hour/vendor showcase to close the day.  All at a new venue – the Nicollet Island Pavilion.  Plus, three virtual breakout sessions that can be viewed May 10 – June 10th, with follow-up “live” Q & A sessions scheduled for each.

Please register today and join us!


Note: This content and analysis is for informational purposes only and should not be construed as legal advice.  Please consult your legal and financial advisors for detailed information before taking any action.

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