Last week brought great news for practice owners who want to best utilize their PPP money.
Here are the changes made to the PPP rules by the Paycheck Protection Program Flexibility Act (PPPFA) enacted into law the end of last week:
- Extends the 8-week Covered Period to 24 weeks, giving practice owners triple the time to spend their PPP money and still qualify for full loan forgiveness.
- Gives employers until 12/31/20 (versus the prior 6/30/20 deadline) to staff up to 2/15/20 levels to meet the Safe Harbor and qualify for full loan forgiveness.
- Reduces the percentage of PPP money to be spent on payroll costs from 75% to 60%.
- Makes it easier to count non-returning employees in the forgiveness calculation.
- Extends the repayment term for unforgiven PPP funds (which will include the EIDL Grant of $1k per employee) from two years to five years.
- Allows businesses to defer paying their employer matching Social Security taxes until 2021 and 2022 even if they receive a PPP loan.
Below is a link to download a PDF of an easy-to-understand summary sheet provided by the American Institute of Certified Public Accountants (AICPA) on the Paycheck Protection Program Flexibility Act: