Feds Finally Pass a New Stimulus Bill - What’s in it for Dealers

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Over the weekend, Congress passed a $2.3 trillion spending bill that provides $900 billion in coronavirus relief and $1.4 trillion to fund the government through Sept. 30.  

The bipartisan legislation authorizes a one-time $600 stimulus check for people who earn less than $75,000 per year ($1,200 for a married couple earning $150,000 or less) and an extra $600 payment per dependent child to qualifying taxpayers.  The bill contains a weekly unemployment insurance supplement of $300.

For dealers, the most significant news in the Bill is that:

  • The legislation clarifies that business owners can write-off expenses paid with forgiven PPP loans, giving companies a tax break up to the amount of their PPP forgiveness. The legislation overrides an IRS decision that says businesses cannot claim deductions on costs, such as rent and wages, paid for with tax-free PPP money. This reinstates the intent of the original legislation to provide tax-free funding to small businesses that needed it.

    However, NYS will NOT be altering its position on deductibility of costs.

  • An additional $284.4 billion in Paycheck Protection Program (PPP) forgivable loans for small businesses was made available. This round will be similar to the first round of PPP funding, but will be limited to companies with less than 300 employees who have experienced a 25% or more decline in revenue. The total PPP funding available to a company in this round is limited to $2 million. Dealers may be able to qualify for this second round of PPP loans if certain qualifications are met.

In addition, Sen. Chuck Schumer was instrumental is adding $4.2 billion for the MTA in the bill. The MTA aid will help the agency avoid layoffs for the time-being, but the MTA still faces an $8 billion deficit through 2024.  

Additional highlights assisting the transportation sector include:

  • $15 billion to reinstate payroll reimbursements to airlines,

  • $10 billion for state highways

  • $2 billion for the private motor coach, school bus, and ferry industries

  • $1 billion for Amtrak

  • $14 billion targeted at transit agencies to keep services running for essential workers and others who use rail, bus, paratransit, and other forms of mass transportation

The bill does not provide direct aid to states suffering severe budget deficits caused by the COVID-19 crisis.

The Association the contributors of this article are continuing to review the legislation and will update members of other important items.

GNYADA Thanks Steve Rosenblatt, CPA of Rosenblatt, Levittan, Vulpis, Goetz & Co. and Kenneth Cerini, CPA of Cerini & Associates for their contributions to this article.