I wanted to send out a quick notice on the status of PPP Loan forgiveness legislation. Last evening the Senate agreed to pass the previously approved House bill extending the eight week spend period to 24 weeks. They also lowered the payroll costs threshold from 75% to 60%. As written it is a cliff parameter meaning either you pass the test or not. If your payroll costs are 59.999% there is NO loan forgiveness; at 60% you do still have to meet the full-time equivalent employee test to receive full forgiveness.
Also, the ability to defer the employer portion of FICA and Medicare taxes to 2021 and 2022 has been extended to PPP Loan recipients. The original bill stated the tax deferral was no longer available once an employer received notice of their loan forgiveness. With the new bill deferral is available to any employer who fit the small business parameters regardless of whether or not they received a PPP loan.
The President must still sign the legislation, but that is expected to be a quick turnaround. Additional information can be found here.
If you have any additional questions, please let us know.