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What’s in the New Coronavirus Stimulus Package for Production Companies?

Original publish date: December 30, 2020

Production companies hit hard by the COVID-19 pandemic and its various phases of shutdown and restarting have been eager to see the additional relief promised by the new coronavirus stimulus package. The Consolidated Appropriations Act of 2021 lays out spending for the next year and contains multiple modifications to existing laws including the CARES Act and expiring tax provisions, along with several new programs.

Film, TV and new media production companies care most about the Paycheck Protection Program (PPP), the Employee Retention Credit (ERC) and the Families First Coronavirus Response Act (FFCRA). We give you the bullet points on how those were impacted by the new legislation, as well as the new $15 billion in grants specifically for shuttered entertainment venues and related businesses.

Paycheck Protection Program (PPP) Loan Updates for Production

With a specific focus on aiding small businesses like independent production companies impacted by the pandemic, the agreement sets aside $285 billion for additional loans under the PPP created under the CARES Act. Among other measures, the new legislation sets aside $12 billion specifically for minority-owned businesses. Further focusing on small businesses, publicly traded companies such as the studios will be ineligible to apply this time around.

Extension of Employee Retention Tax Credit (ERC)

The ERC encourages independent production companies, content creators and other small businesses to keep employees on their payroll by offering a tax credit against certain employment taxes the production company normally pays. The bill offers improved conditions and extends these credits until June 30, 2021.

Grants for Shuttered Entertainment Venue Operators

The bill also provides $15 billion to support a broad category of entertainment-related businesses that have been shuttered for most of the year – including small theaters, live venue operators or promoters, theatrical producers, live performing arts organization operators, motion picture theatre operators, and talent representatives – who demonstrate a 25% reduction in revenues.

Such grants shall be used for specified expenses such as payroll costs, rent, utilities, and personal protective equipment.

FFCRA: Paid Sick and Family Leave Mandate Ends, but Production Employer Credits Extended

The latest stimulus bill does not extend the sick or family leave mandates, ending December 31. However, as written, the bill does continue a refundable tax credit to subsidize the cost to businesses if they provide paid leave.

That means come January 1, 2021, production company employers will no longer be required to offer two weeks of paid leave to workers who become sick with COVID-19, or up to 12 weeks of family leave to people who cannot work due to child-care needs… but the federal government will continue the payroll tax credit through and until March 31, 2021.

Keep in mind there are state and local mandates, in addition to collective bargaining agreements, which may extend beyond the FFCRA.

Download the full appropriations bill here.

Get more info on COVID-19 and Production

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