Member Alert: Federal Stimulus Package and Priority Vaccine Distribution

Member Alert: Federal Stimulus Package and Priority Vaccine Distribution

Stimulus Summary

 

Tax Treatment of Paycheck Protection Program (PPP) Loans

  • PPP loan proceeds are not taxable, and expenses paid with the proceeds are deductible.
    • The bill clarifies that gross income does not include amounts forgiven under the PPP Program.
    • It also clarifies that deductions are allowed for otherwise deductible expenses paid with the proceeds of a PPP loan.
  • This applies to both first and second draw PPP loans.

PPP Second Draw Loans

  • The bill creates a second loan program from the PPP with a maximum amount of $2 million.
  • As with the first PPP loans, these loans will be eligible for full forgiveness.
  • Among other factors, to qualify for this loan, an entity must demonstrate at least a 25 percent reduction in gross receipts in any quarter of 2020 when compared to the same quarter of 2019.
  • The loan amount will be up to 2.5 times average monthly payroll costs.
  • The Second Draw Loan program has an affiliation waiver for news organizations, which allows individual newspapers to apply for these loans independent of its owner of other small newspapers or other businesses.
    • This waiver should allow newspaper groups to apply for a larger number of loans and potentially receive a larger total loan amount, as they can apply on a lower, non-consolidated level and thus would not be as affected by the $2 million maximum.
    • This also helps newspaper groups who might not qualify with a revenue decrease at the consolidated level, but have individual locations that would qualify.

PPP Loan Forgiveness

  • PPP loans less than $150,000 shall be forgiven if the recipient signs a one-page certification.
  • A forgiveness application, or other documentation, will not be required for loans of this size.

Once the bill is enacted, the bill gives the SBA 10 days to issue regulations to carry out this Act.

 

Vaccine Update

 

The Center for Disease Control’s Advisory Committee on Immunization Practices (ACIP) released recommendations on the prioritization of vaccine distribution after long-term care patients and frontline health care workers. The Committee included the “Media” in the list of “essential workers” that should receive a vaccine in Phase 1c. Newspaper production personnel would arguably be included in Phase 1 b. Here is the breakdown of the two Groups as recommended by ACIP:

  • Phase 1b Group (49 million people). This group includes police, firefighters, teachers and school personnel; food and agriculture workers; manufacturing workers; corrections workers; U.S. Postal Service workers; public transit and grocery store workers. This group also includes 19 million seniors 75 years old or older.
  • Phase 1c Group (129 million people). This group includes the remaining seniors, 65-74 (28 million people), and other “essential workers” (20 million people) in Transportation and Logistics, Food Service, Shelter & Housing (including construction), Finance, IT & Communication, Energy, Media, Legal, Public Safety (Engineers), Water & Wastewater.  This group also includes people between the ages of 16-64 with high-risk conditions (81 million people).

For further information, please contact Holly Lubart, Director of Government Affairs.