Hey all,

It’s official. The President signed into law the changes on PPP loan forgiveness.

HAPPY FRIDAY!

In case you missed our prior newsletter, here is what this means:

• The 8-week period may be extended to 24 weeks. I say “may” because it is not required, and it might not be in your best interests. If you can get to the full forgiveness within the 8-week period, file the forgiveness application, be done with it, and get the loan off your books. But this is HUGE for many of you. Just be sure to continue monitoring and keeping detailed, separate records.
• Be gone with the 75% payroll rule. You must now spend at least 60% of your total eligible expenses on payroll and no more than 40% on business mortgage interest, rent, and utilities. HOWEVER, here’s the caveat: if you do not spend 60% or more on payroll costs, there will be no forgiveness at all. Although the 24-week rule should alleviate concerns about the 60% payroll rule, you’ll want to keep this in mind.
• The June 30th date for rehire has been pushed back to December 31st. This is especially relevant for those businesses that have experienced a decrease in full-time equivalent headcount. Get your people back on payroll if you can, but if not, the new 24-week rule should definitely help.
• If you’ve tried to rehire people back to work and couldn’t, now you will also not be penalized if you couldn’t find qualified replacements or social distancing and federal health guidance prevented you from doing so. Again, just be sure to keep this documented.
• The repayment period has been extended to 5 years.
• Businesses can now defer the payment of the employer’s share of Social Security payroll taxes (6.2%) until 2021 when 50% must be paid and in 2022 when the remaining 50% will be due.

If you need more information related to COVID-19, make sure to check out our website which we have been updating regularly.

Have a great weekend!

Tim