The Paycheck Protection Program Flexibility Act ("PPPFA") was signed into law on June 5, 2020. 
 
The PPPFA tweaks the Paycheck Protection Program (PPP) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act to give borrowers greater flexibility, both in terms of how they spend their loans and the length of time they have to spend it, and relaxes some requirements for forgiveness.
 
In summary, the PPPFA:
 
  • Extends the repayment term from 2 to 5 years;
  • Lowers the amount of loan money that must be utilized for payroll to 60% (was 75%);
  • Extends the time period to use forgivableloan funds from 8 to 24 weeks;
  • Extends the rehiring deadline from June 30, 2020, to December 31, 2020;
  • Allows borrowers to defer payment of certain payroll taxes regardless of whether or not forgiveness of the PPP loan is granted;
  • Eases the PPP's rehire requirements in certain circumstances; for example, when the employer can prove it's unable to return to pre-pandemic staffing levels due to compliance with requirements established by the CDC or OSHA related to social distancing or workplace safety.
The PPP Flexibility Act is complicated. It is critical that you engage your tax advisor or accountant as to how these changes may affect your business.
 
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