Nicole Vullo
on
On June 5, 2020, the Paycheck Protection Program Flexibility Act (PPPFA) was signed into law.The new act allows businesses with forgiven PPP loans to postpone Social Security taxes through the end of 2020. Before this new act was signed into law, any loan recipients were required to stop postponing Social Security taxes as soon as any portion of their loan was forgiven.
The additional provisions include:
- Reducing of the percentage of loan funds to be spent on payroll from 75% to 60%
- Expanding the “covered period” for use of the loan from eight weeks to 24 weeks
- Expanding the period of time for employers to overturn reductions in employment that took place between February 15 and April 26, 2020 from June 30, 2020 to December 31, 2020
- Increasing the loan maturity time period from two years to five years
- Allowing borrowers to postpone payment until loan forgiveness is decided (Formerly six months after loan the loan was issued).
These new provisions fall in line with previous rules. This was confirmed in a joint statement by the SBA and Treasury on Monday June 8th.
It is important to note that any business that received a PPP loan prior to June 5, 2020, may choose to keep the original eight-week covered period to spend loan funds. The deadline to apply for a PPP loan is still June 30, 2020.
As we navigate through these times of uncertainty and live out our new normal, we here are at The Foresight Companies want to be your source for all topics related to your business operations.
Please visit our COVID-19 new Business Operations Resource Center frequently as we continue to update as changes are occurring.
If you have any questions or concerns, please do not hesitate to pick up the phone and give one of us a call at 1-800-426-0165.
*Please note that as information is updated and modified, terms and conditions are subject to change.