06/18/2020
Back to COVID-19:
Paycheck Protection Program Flexibility Act of 2020
June 05, 2020
Paycheck Protection Program Flexibility Act (PPPFA or the “Act”), was signed into law on June 5, 2020, to, among other things, extend the time period allowed for businesses to spend Paycheck Protection Program (PPP) loan proceeds, and allow loan forgiveness recipients to continue deferring payment of the employer share of the Social Security tax.
The Paycheck Protection Program (PPP) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The PPP created a new loan program through the Small Business Administration (SBA) to enable businesses and nonprofit organizations with 500 or fewer employees to obtain federally guaranteed loans to be used for payroll, rent, utilities and other specified costs. PPP loans can be 100 percent forgivable if employers maintain specified employment and wage levels, as measured by the number of full-time equivalent employees and wage levels over an eight-week “covered period.”
Businesses do not need to pay interest on PPP loan amounts forgiven, and forgiven amounts are not considered federal taxable income to the business. As of May 30th, the SBA reported that more than 4.4 million PPP loans have been made since the program began on April 3, with over $510 billion disbursed.
