Here are the key updates and clarifications that we recently approved related to the PPP Loan Forgiveness in the recently passed legislation:
- The 8 week covered period is extended to 24 weeks or until December 31, 2020, whichever comes first.
- You can still elect to keep the 8 week covered period and begin submitting requests for forgiveness.
- The previous rule of having to spend 75% of your loan on payroll costs has been relaxed to 60% (However, this is now all or nothing)
- The safe harbor of replacing FTE’s by June 30th is now extended to December 31st
- The bill adds more flexibility to get forgiveness if you experience a reduction in FTEs. Loan forgiveness will not be reduced if in good faith, you are able to document the following criteria below:
- An inability to rehire individuals who were employed on 2/15/2020 and an inability to hire similarly qualified employees for unfilled positions by December 31, 2020; or
- There was an inability to return to the same level of business activity as such business was operating at before February 15th due to compliance with requirements established or guidance issued by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration during the period beginning on March 21 1, 2020, and ending December 31, 2020, related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID– 19.
- Officially, you can defer paying the employer portion of social security taxes until the end of 2021 and 2022
- The payback period for loans that are not forgiven can be extended up to 5 years, this must be negotiated with your bank.
We will continue to update everyone as additional information becomes available.