President Trump has signed the Paycheck Protection Program (PPP) Flexibility Act of 2020 into law. The new measures were rolled out under the CARES Act, and includes provisions that offer the loan recipients greater flexibility over the use of the PPP loan proceeds.
Key Updates Include:
- Lowering the threshold on loan proceeds towards payroll costs from 75% down to 60%
- Provides up to 24 weeks to use the loan proceeds
- Extended the rehire and compensation safe harbor timelines to December 31, 2020
Additionally, the new provisions allow employers who received loan forgiveness on PPP loans the ability to continue to defer social security tax payments on wages paid between March 27th, 2020, and December 31, 2020. For loans not forgiven provides 10 months for deferring initial payments towards the loan and up to 5 years for repayment of the loan as a whole.
EANE Members can view the entire detailed E-Alert about the Paycheck Protection Program Flexibility Act of 2020 from June 8, 2020 on the members-only Newsletters & E-Alerts page.