BREAKING NEWS! – Payroll Protection Program Flexibility Act Passes House and SenateJune 4, 2020 | Category: Asset Protection, Corporate and Taxation, Estate Planning and Probate, News
As reported in a recent Legal Beat, the U.S. House, last week, overwhelmingly passed the Paycheck Protection Program (PPP) Flexibility Act, by a vote of 417-1. Yesterday, the Senate passed the House bill. This bill provides new flexibility to PPP borrowers in several key aspects. Borrowers can apply for a PPP loan through to December 31, 2020. However, Senator Ron Johnson convinced the Senate leadership to sign a "letter of intent" that the PPP program not be automatically reauthorized through the end of the year. "Put that letter in the Congressional Record so that we are certain that we're not reauthorizing this or authorizing it through Dec. 31, that the authorization does end June 30," Johnson said.
--Instead of an 8-week period to spend PPP funds, borrowers have a 24-week period after the PPP loan is approved or until the end of 2020 (whichever comes first) to spend PPP funds and qualify for loan forgiveness.
--The requirement to spend 75% of a PPP loan on payroll costs for maximum loan forgiveness has been reduced to 60%.
--For new PPP loans approved after the law is passed, the loan term is 5 years. (Existing PPP loans would still have a loan term of 2 years.)
--Borrowers can defer payroll taxes on PPP loan proceeds used for payroll.
I will provide more details on the PPP Flexibility Act in a future Legal Beat.