Applies to: All Employers with PPP Loans
Effective: June 5, 2020
HR 7010 recently extended certain provisions of the Paycheck Protection Program (PPP) Flexibility Act of 2020.
- Borrowers can spend up to 40% (formerly 25%) on qualified non-payroll costs, such as rent and utilities costs.
- The time for borrowers to spend loan funds and meet forgiveness requirements has been extended from June 30 to December 31, 2020.
- Loans must now have a minimum maturity of 5 years (rather than 2 years).
- Payments on loans can be deferred until loan forgiveness is given to the lender by the SBA, or 10 months after the end of the covered period if the borrower did not yet request loan forgiveness.
- The time for employers to restore full-time equivalent (FTE) employees to their status and wages in order to qualify for loan forgiveness is extended from June 30 to December 31, 2020.
- Employers who are unable to return to the same level of business activity under certain circumstances or rehire laid off or similarly qualified workers may still qualify for loan forgiveness with sufficient documentation.
- Borrowers can now defer payroll taxes that were previously prohibited under the CARES Act.
Action Items
- Read the text of the bill here.
- Prepare for revised requirements for loan forgiveness.
- Subscribers can call our HR Hotline at (833) 268-5531 or send an email to hrsolved@onedigital.com for further assistance.
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