House Passes PPP Flexibility Act That Relaxes Forgiveness Requirements
The House passed the Paycheck Protection Program (PPP) Flexibility Act on May 28, 2020. The bill received an overwhelming bipartisan vote and is now headed for the Senate. Key highlights in the bill include:
- Extending the loan repayment period from two to five years
- Extending the covered period borrowers have to use the funds from eight weeks to 24 weeks, or Dec. 31, 2020 (whichever is earlier)
- Allowing borrowers who receive loan forgiveness to also defer payroll taxes
- Reducing the amount forgiven required to be spent on payroll from 75% to 60%
- Pushing back the rehire date from June 30 to Dec. 31, 2020
It is important to note that until the Senate approves the bill and forwards to the President for signature, the current PPP guidance remains unchanged.
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