Congress Passes Paycheck Protection Flexibility Act

Changes Made to PPP Loan on June 3rd

On June 3rd, 2020 Congress passed the Paycheck Protection Flexibility Act that was introduced by the House. Once signed by President Trump, it will become law.

Significant changes to the PPP loan program as a result of the new bill are as follows:

1. Changed Maturity of loans remaining from 2 years to 5 years for any amounts that are not forgiven

2. Extended covered period to spend the money on eligible costs from 8 weeks to 24 weeks

        + For those who already received the loan, can elect to use 8 weeks instead of 24 weeks if             you want

3. Changed the requirement that 75% be spent on payroll to only 60%

4. Added a Cliff whereby if less than 60% is spent on payroll , then NO amount will be forgiven. This is different than the prior PPP rules, whereby you could still receive a     pro-rated amount if less than 75% was spent on payroll

5. Changed date of rehire exemption from June 30 to December 31

  •          + Still contains the same rules regarding good faith attempt to rehire employees who             choose not to come back and it not affection the FTE amount
  •          + Added a provision where it won't count against you if you can't be at the same FTE level             because of compliance with federal government requirements or other guidance related             to COVID-19.

6. All businesses are eligible to defer payroll taxes

  •         + Previously, if you got the PPP, you couldn't defer payroll taxes under the CARES Act. Now             you can defer payroll taxes from the date the bill becomes law until December 2020             (with 50% due 12-31-2021 and 50% due 12-31-2022) even if you received the PPP loan.

Click HERE to read the entire bill (which is only 10 pages!)

Click HERE for an article that summarizes the bill and addresses questions that still need to be answered that we are waiting on further guidance.

     
     
     

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