President Trump has officially signed a bill passed by the House and the Senate that loosens the requirements for PPP Loan forgiveness. This bill was passed in response to feedback that suggested more money was needed for non-payroll related costs, and that the 8 week period was too short for businesses that needed more time to resume operations or rehire their staff.
Key changes included in the new bill are as follows:
- The 8 week period may be extended to 24 weeks if the borrower chooses to do so. New borrowers will have a 24-week cover period, but the period may not extend beyond Dec. 31, 2020.
- The percentage of the PPP loan required to be spent on payroll was reduced from 75% to 60%. The borrower must spend at least 60% on payroll, however, or none of the loan will be forgiven. Previously, if the borrower didn’t meet the 75% mark, part of the loan could still be forgiven.
- The safe harbor date, which had been June 30, is now Dec. 31, 2020. Employers have until then to restore their workforce and wages to pre-pandemic levels.
- Borrowers may still exclude employees who refused to come back to work from FTE calculations, and may now also make adjustments if they were not able to find qualified employees, or were unable to restore operations to pre-pandemic levels due to COVID-19 operating restrictions.
- Repayment of the loan has been extended from 2 years to 5 years for new borrowers. The interest rate remains at 1%.
- PPP loan recipients may now also defer payroll tax payments.
These changes will ensure that more businesses qualify for loan forgiveness, and the added flexibility will allow them to spend PPP loan funds on the areas that will help them keep their business open.
Time & Pay is able to produce a report that will provide the information needed for the PPP Loan Forgiveness Application. We have worked tirelessly to help our clients apply for the PPP Loan, and are extremely excited to help them apply for forgiveness when the time comes. If you have questions about the PPP Loan, loan forgiveness, or the information that you’ll need, contact us today!
About Time & Pay:
Time & Pay is a professional payroll service provider located in Johnson City, TN. We service businesses of all sizes and types throughout the United States. Founded in 1992, Time & Pay provides businesses with complete payroll services, guaranteed payroll tax compliance, automated time and attendance systems and services, pay-as-you-go workers comp, human resource management systems and services, ACA compliance and more. We provide our customers with the cost effective tools you need to better manage your payroll, your employees and your business. Time & Pay’s services guarantee you will save money, time and aggravation and we back them up with the customer service you expect and deserve. Contact Us today to learn why business owners throughout the country are saying:
“Time & Pay! Why would you do payroll and timekeeping any other way?”