Applying for PPP Loan Forgiveness
On June 5, 2020, President Trump signed the Paycheck Protection Program Flexibility Act of 2020 (PPP Flexibility Act) into law. This new statute amends several key criteria of the CARES Act, including:
- Extending the Covered Period during which forgivable costs must be accumulated from eight weeks to 24 weeks, while leaving open the option of selecting an eight-week covered period for loans issued before June 5, 2020.
- Increasing the minimum loan maturity period to five years for loans issued on or after June 5, 2020 and permitting borrowers who received a loan prior to June 5, 2020 to negotiate a mutually agreeable extension of the maturity date.
- Extending the deferment of loan payments to the date on which the loan forgiveness amount is remitted by the Small Business Administration (SBA) to the lender or the date that is 10 months after the termination of the Covered Period if a PPP Loan Forgiveness Application is not submitted during this 10-month period.
Since the passage of the PPP Flexibility Act, the SBA has released four new interim final rules (IFRs), two new versions of the PPP Loan Forgiveness Application, and one new FAQ, with more FAQs anticipated. These publications are all available on the SBA’s Paycheck Protection Program webpage.
This article provides a comprehensive look at PPP loan forgiveness, including changes arising from the enactment of the PPP Flexibility Act and subsequent SBA guidance.
Ted serves as partner, tax counsel, and Professional Practice Leader – Tax. As a certified public accountant and tax counsel, Ted advises exempt organizations of all sizes on a wide range of issues. This includes consulting on tax and employee benefit related matters, representation before state and federal tax authorities, and assistance with firm audit or advisory engagements to formulate advice and counsel on important operating and tax issues. Ted also leads the firm’s tax preparation practice, including IRS Forms 990 and 990-T and related state forms.