New PPP Loan Report & Legislative Update

As promised, below you will find instructions for Phase 2 of the PPP Loan Forgiveness Report.   Additionally, Trump just signed into law the PPP Flexibility Act of 2020.  The full legislative text can be found here. The legislation amends and expands the Cares Act provisions related to PPP Loan Forgiveness.  Below are some of the key points:

  • Borrowers may choose to extend the 8-Week Loan Period to 24 weeks or December 31, 2020, whichever is sooner.
  • The deadline to restore FTEs and employees’ wages to pre-pandemic levels in order to achieve full loan forgiveness is extended from June 30, 2020 to December 31, 2020.
  • Borrowers must spend at least 60% of the loan money on payroll costs instead of the previous 75% requirement.
  • The maturity date for any loan amounts after the forgiveness period will be a minimum of 5 years instead of 2 years and the deferment period is extended from 6 months to the date the borrower’s loan forgiveness amount is determined.
  • The legislation provides two new exceptions allowing borrowers to achieve full PPP Loan Forgiveness even if they are unable to restore their workforce to pre-pandemic levels: (1) The first exception applies when a borrower cannot find qualified employees for unfilled positions and (2) the second exception applies when an employer cannot restore its operations to pre- pandemic levels of activity as a result of social distancing, sanitation requirements, or customer safety needs as a result of requirements established by the Secretary of Health and Human Services, the CDC, or OSHA from March 1, 2020 through December, 31, 2020. These exceptions leave flexibility for employers who are unable to hire back employees as a result of the pandemic.
  • The Cares Act Section 2302 provided for the ability of employers to delay the payment of the employer portion of Social Security payroll taxes. However, this relief was not available to employers once indebtedness was forgiven under the PPP Loan. See IRS FAQs here. The legislation allows borrowers to take full advantage of the employer payroll tax deferrals regardless of whether a PPP loan was forgiven.

PPP Loan Forgiveness Report Phase II

Click on this link for a video and power point with the instructions for the PPP Loan Forgiveness Report Phase II.  This report was updated following the clarifications from the SBA released on 5/29/2020, including the new PPP Loan Forgiveness Application.  The report assists with completing the information required on the PPP Loan Forgiveness Application.  We realize that the passing of the PPP Flexibility Act of 2020 and further clarifications from the SBA and Department of Treasury may necessitate adjustments to the PPP Loan Forgiveness Report.  We will continue to amend and update the report as we receive continued guidance.  

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