May 29, 2020
The House passed the
Paycheck Protection Flexibility (PPP) Act, H.R. 7010
yesterday which extends the covered period from eight weeks to 24 weeks. This is the time PPP recipients have to spend their funds. The measure also lowers to 60% from 75% the portion of PPP funds borrowers must spend on payroll costs to qualify for full loan forgiveness. That change would allow borrowers to direct more funds to costs such as rent and utilities
A bill close to a vote in the Senate would double the covered period of PPP spending to 16 weeks but would not change the 75% payroll cost requirement. Treasury Secretary Steven Mnuchin has maintained support for the 75% threshold.
The House legislation also more than doubles the minimum term period for the loans to five years from two years, and allows companies whose loans are forgiven to delay payment of payroll taxes.
The bill is now headed to the Senate.
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at
Richard.Higgins@MCC-CPAs.com
. I can be reached at
Marty.McCarthy@MCC-CPAs.com
. As always, we are happy to help. Have a good Memorial Day weekend.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).