PPP Flexibility Act Approved by the Senate

We hope you have been safe and healthy during this extended tax season!

This week, the PPP Flexibility Act (PPPFA) of 2020 was passed by the Senate and now moves on to be signed by the President. The PPPFA will help many small businesses that received loans via the Paycheck Protection Program and protect payrolls without costing extra taxpayer dollars. Two big changes related to loan forgiveness:

  1. Loan recipients now have 24 weeks (vs. 8 weeks originally) to spend the funds from the time of origination.
  2. 60% of the funds (vs. 75% originally) must be spent on payroll.
    • Note there is now a cliff: if LESS THAN 60% of the funds is spent on payroll, there is no loan forgiveness.