Small business tax resources for coronavirus

Get updates on the government assistance programs and available aid for small business owners.

Latest update: A third round of relief is available. Read below.

Questions about aid for individuals and families?

Visit our resource center for individuals & families

Want help with taxes, bookkeeping, or payroll? Meet Block Advisors. Your small business partner.

Resource Hub

March 18, 2021

What Is the Paycheck Protection Program (PPP)?

March 22, 2021

What is the Economic Injury Disaster Loan and how can it help small businesses?

Load More
UPDATED 04/01/2021

Third relief bill and small business taxes

Third coronavirus small business financial and tax relief

Finally, some good news for small business owners. You’ve been hit especially hard during the pandemic, but more aid is available to help keep you afloat. The new American Rescue Plan (ARP) Act includes $48 billion in new small business support. This much-needed lifeline includes:

  • Additional Paycheck Protection Program (PPP) funding and expanded eligibility for certain nonprofit entities. Internet Publishing Organizations are now eligible for first and second draw loans.
  • New Economic Disaster Loans (EIDL) Grants for businesses in low-income communities and exclusive access to certain business owners
  • Dedicated funding restaurants, bars and other food and drinking establishments

Need help understanding how the new relief bill might benefit you? Our Block Advisors small business certified tax pros can help you make sense of it all.

PPP extended loan period and additional funding

The PPP Extension Act of 2021 gives small business owners more time to apply for these valuable loans. You now have until May 31, 2021, to submit your application and take advantage of the  additional $7.25 billion in funding from the ARP Act. Note that some lenders may have deadlines prior to May 31.

PPP second draw loans. If you previously received a PPP loan, you have a second chance at funding with the renewed program. New loans are available if:

  • You’ve used all prior PPP funds
  • Have fewer than 300 employees
  • Can show losses of at least 25% over the prior year’s quarter

PPP first draw loans. If you have not previously received PPP funding, you are also eligible to apply. Loans of up to $2 million are available for businesses with less than 500 employees*, sole proprietors, independent contractors and eligible self-employed individuals.

 

New Economic Injury Disaster Loan program measures for those hardest hit

The Economic Injury Disaster Loan Program (EIDL) was intended to get money quickly to small business owners to alleviate cash flow issues caused by the pandemic. The ARP Act will ensure money is quickly distributed to the hardest-hit by:

  • Targeting $10,000 advance grants for low-income communities for businesses with no more than 300 employees that have a loss of more than 30%;
  • Providing supplemental grants of $5,000 for businesses with no more than 10 employees that have been “severely” (loss of 50%) and “substantially” impacted (loss between 30-50%).  in two stages. With these supplemental grants, some businesses may be eligible to receive up to $15,000;
  • Extending the covered period for emergency EIDL grants through Dec. 31, 2021;
  • Allowing more flexibility for the SBA to verify grant applications and extending the time for SBA to approve and disperse emergency EIDL grants from three to 21 days;
  • Authorizing an additional $15 billion for emergency EIDL grants.

 

How you can secure new funding

Loan applications can be submitted with banks and approved financial lenders. Even if you applied before and were denied, this new bill includes new funding so try again. This new round of funding also has set-asides for community lenders to assist hard-to-reach communities and unbanked or underbanked small businesses.

The Impact to Your 2020 Small Business Taxes

How will all this impact your 2020 taxes?

  • Money received from your forgivable PPP loan will not be included in your gross income at the federal level.
    • You will need to check your state to determine if the forgiven loan will be taxable on your state tax return.
  • You can deduct qualifying expenses paid with the proceeds of a forgiven PPP loan or emergency EIDL grants. Good news: this overrides previous IRS guidance.
  • In addition to payroll, mortgage interest, rent or lease payments and utilities, forgivable PPP expenses have been expanded to include:
    • Personal Protective Equipment (PPE) and investments in adapting your business to comply with health and safety guidelines;
    • Operational expenses for payments on software and other items for HR and accounting needs;
    • Essential supplier costs to keep your business open, including perishable goods;
    • Property damage as the result of public disturbances that aren’t covered by insurance.
  • If you provided paid sick leave and paid family and medical leave in 2020, your employer tax credits can be extended through March 31, 2021. The maximum wage amount and percentage of self-employment income were also increased with the ARP Act.
  • The employee retention tax credit is a refundable tax credit against certain employment taxes. The ARP Act extends this credit until Dec. 31, 2021.

We know this information is complicated, but you don’t have to go it alone. Block Advisors small business certified tax pros are here to help.

Our small business tax professional certification is awarded by Block Advisors, a part of H&R Block, based upon successful completion of proprietary training. Our Block Advisors small business services are available at participating Block Advisors and H&R Block offices nationwide.


Small business coronavirus FAQs

UPDATED 03/10/2021

New coronavirus relief and small business taxes

How do I apply for small business financial aid?
Will receiving aid impact my taxes?