Posted 4 weeks ago - by

Changes to SBA’s Paycheck Protection Program have been signed and approved

 

The Paycheck Protection Program was enacted in mid-April in response to the struggles that small businesses were faced with due to COVID-19. However, the program itself came with unintended difficulties and as we near its’ expiration date of June 30th, the House of Representatives has passed a new program to address some of these.

 

The Paycheck Protection Program Flexibility Act of 2020 was signed and approved by the President on June 5th and includes the following:

  • Extend the period of forgiveness to 24 weeks, or until December 31 st
  • Replaces the 75/25 rule (non-payroll expenses/payroll expenses) with a 60/40 rule
  • Allow a business to also receive payroll tax deferment
  • Repayment of the loan will extend to five years if it does not convert into a grant
  • Grants small businesses additional time to rehire or obtain forgiveness for the loan if they were prevented from operating at normal capacity
  • Remove the limits imposed on small business that were unable to rehire, hire, or return to the capacity of operation before the pandemic
  • PPP loan interest and payment on principal fees will be deferred until loan is forgiven. If a borrower fails to apply for forgiveness within 10 months of the end of the forgiveness period, then the start date for payments will commence on that date
  • The Act lifts the ban on borrowers whose loans were partially or completely forgiven from deferring payment of payroll taxes. The payroll tax deferral is now open to all PPP borrowers.

Payroll systems is closely monitoring the global threat of COVID-19. We can help you navigate through any unexpected questions as well as assist with necessary reporting during this unprecedented time. Our HR and payroll solutions, Including paperless employee onboarding, and benefit administration are easy to scale to suit your specific needs.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.