Since the Paycheck Protection Program (PPP) was rolled out a few months ago in response to Covid-19, many questions have been raised on what the funds can be used for, along with what the repayment terms would be. The program was not without its issues, but a new Act is hoping to provide more clarity for businesses.
On June 3rd, 2020, the Senate passed the PPP Flexibility Act (HR 7010) which provides significant extensions on the loan forgiveness period, and much more.
HR 7010 updates include:
- The loan forgiveness period is increased from 8 to 24 weeks
- Businesses can still file after 8 weeks if they want to use that time, but you must use the 8 week or the new 24 week period
- Proceeds required from payroll have been reduced from 75 to 60 percent
- The loan repayment period has been increased from two to five years
- A tax deferral is being allowed for PPP participants – It was not allowed initially under the CARES Act
- The rehiring deadline for full – time employees has been extended to June 30th
We are sure further updates will come, as the act has yet to be signed into law. We at Marcellino & Tyson, PLLC, recommend you continue to keep and maintain all required documentation for how you are using PPP funds.
This includes, but not limited to, the number of employees you have and their pay rates during the forgiveness period, payroll expenses paid out after receiving PPP funds, allowed health insurance and retirement expenses, and payment of eligible rent, mortgage, and utility expenses.
We will keep you updated as we learn more. In the meantime, if you have any questions regarding the PPP and HR 7010, please feel free to contact us at firstname.lastname@example.org or (704) 919-1519.