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3 Takeaways for

3 Takeaways for Agents on the New Financial Relief Package

Nearly nine months has passed since the CARES Act brought relief to individuals and businesses across the country.  From stimulus checks to small business financial aid, the CARES Act has helped millions of Americans navigate an incredibly tough year.  Now, on December 22nd 2020, we have seen the second round of COVID financial relief being passed by Congress – a $900 billion package that includes 3 huge takeaways for Agents.

While the legislation may be lengthy and the amount of aid the bill will provide is extensive, we have taken a look at the recent legislation passed on December 22nd and found the top 3 ways this will impact agency owners across the country:

  1. Updates to PPP Loan Forgiveness and tax implications
  2. Second round of PPP
  3. Second round of individual stimulus payments

Below we go into each of these in a bit more detail.

1. Updates to PPP Loan Forgiveness and Tax Implications

Bottom line: your forgiven PPP loan will not be taxed.

One of the primary areas of concern for business owners, as well as CPA and accounting firms across the country, was how to treat the forgiveness of the PPP loans.  Until this bill, the stance by the Internal Revenue Service was:

  1. The Value of the PPP Loan Forgiveness would not be taxed, however:
  2. None of the qualifying business expenses that made the business eligible for PPP forgiveness could be deductions on this year’s tax return.

What this, in turn, did, was make the PPP loan a taxable event for most businesses.  As long as you were going to achieve a profit equal to or greater than the size of your PPP Loan, you would then have to pay taxes on the value of that loan.

The most recent bill that has passed through Congress, however, addresses this head on and explicitly states that you can claim a normal tax deduction for any and all expenses that helped you qualify for PPP loan forgiveness. 

See for yourself.  The actual language of the new COVID relief law states that “no deduction shall be denied or reduced, no tax attribute shall be reduced, and no basis increase shall be denied, by reason of the exclusion from gross income provided by [the loan forgiveness provision that says forgiven PPP loans will not count as income].

2. Second Round of PPP

Bottom line: the second round of PPP is here but there are far more eligibility requirements that will likely rule out most insurance agents (from what we can see).

We all had a feeling another round was coming.  Well, its here!  $284 billion of the $900 billion stimulus package is set aside for the Payroll Protection Program reboot.  Recipients of the first round of the PPP loan are eligible to re-apply for a second PPP loan in round 2 AND businesses that did not originally apply or receive a PPP loan can apply based on the original eligibility requirements during the first round. 

For those looking to receive a second PPP loan, however, there is one particular NEW eligibility requirement we feel will rule out most insurance agents across the country from the financials that we can see over the past 9 year.

New eligibility requirement for second round of PPP: a business must demonstrate they experienced a 25% reduction in gross receipts (revenue) during a quarter in 2020 compared with the same quarter in 2019.

From all the financials we manage for agents across the country, we thankfully have not been seeing such drastic numbers (although it certainly could be the case).  The industry has been lucky to not have been hit as hard as others.  We have seen dips in revenue due to rate cuts, specifically in auto (not that we have to tell you that), but we typically haven’t seen numbers as far down as 25% for a single quarter.

This being said – KNOW YOUR NUMBERS.  Check your financials, work with your accountant (Club Capital members – reach out to your Account Manager if you need help going through your financials in the Reporting Portal).

3. Second Round of Individual Stimulus Payments

Bottom line: $600 could be coming your way

Millions of Americans are set to receive a second round of direct stimulus payments from the federal government.  It appears to be similar parameters as the first round but many will be receiving far less – though anything is a welcomed sight for those that have been struggling this year.

Individuals who made up to $75,000 in 2019 will receive $600. Married couples who earned up to $150,000 will receive $1,200. Filers listed as “head of household” and who earned $112,500 or less will also get $600. And families will receive an additional $600 — up from $500 in the spring — for each dependent under 18 in the household.

If your 2020 income qualifies you for a larger benefit than your 2019 filing, the difference in payment can be claimed on tax returns filed next year — a process that starts next month. (Source: NBC News)

According to text of the legislation released Monday afternoon, the program is structured similarly to that of this past spring, with the checks getting smaller and eventually down to zero the further you get from $75,000 for individuals, $112,500 for heads of households and $150,000 for joint filers.

As you would hope, the rollout of these payments should be smoother than the first round and the government is reporting tha payments will begin as soon as next week (week of 12/28/20).

This is our take.  Let us know what you think or write to us at  Already a client – contact your Account Manager!

Quick note: this is not to be taken as tax, legal, benefits, financial, or HR advice.  Since rules and regulations change over time and can vary by location, consult a lawyer or HR expert for guidance.


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