PPP Loan Forgiveness - Extended
Today’s blog is a summary of Bill HR 7010 passed by the Senate on 6/3/2020.
The likelihood of forgiveness of a significant portion of your loan is dramatically increased by these four provisions:
If you believe you will utilize all of your loan funds within the eight-week period originally defined in the CARES Act, you still have the option of submitting your application for forgiveness on that basis.
You can now defer the employer’s 6.2% share of 2020 social security tax until 2021 and 2022 (50% each year), regardless of when your loan is forgiven. This was previously restricted.
Whatever portion of your loan isn’t forgiven may now be repaid over five years (was two years under original CARES Act). Also, payment of principal and interest is deferred until the date the lender receives the forgiveness amount from the SBA (original six months under CARES)
Some important questions remain to be answered by the SBA, including:
Expect a new set of FAQs to be released from the SBA now that the legislation has passed at this link: https://www.sba.gov/document/support--faq-lenders-borrowers
As always, the comments here are for informational purposes are should not be considered professional tax advice. We recommend that you consult with the actual laws and regulations and/or have your CPA review your specific situation in light of the latest guidance from the government.
Melinda Bucknam, CPA | 06/04/2020
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