Insights

Employee or Independent Contractor Status Clarified Further by The U.S. Department of Labor

Corporate Transparency Act Ruled Unconstitutional. The Impact On Beneficial Ownership Information Reporting.

Reminder of Annual Election of New York State and New York City Pass-through Entity Tax (PTET)

House Passes Bill Expanding Child Tax Credit and Business Breaks

Senate Passes Updated Version of
Paycheck Protection Program

COVID-19 Business Update

The U.S. Senate has passed the House version of a revised  Paycheck Protection Program (PPP) bill.  The Senate approval sends the bill, called the Paycheck Protection Flexibility Act, to President Donald Trump, who is expected to sign it.

The following is a summary of the legislation’s main points:

  • PPP borrowers can choose to extend the original eight-week period to spend PPP proceeds to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
  • The payroll expenditure requirement drops to 60% from 75%.  However,  borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
  • Borrowers can use a 24-week period to restore their workforce levels and wages to the pre-COVID-19 levels required for full forgiveness. This must be done by December 31, 2020.
  • The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust their calculations if they cannot find qualified employees or were unable to restore business operations to February 15, 2020, levels due to COVID-19 related operating restrictions.
  • Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
  • Borrowers can now defer the employer’s share of FICA payroll taxes for two years. Half of the payroll taxes will be due by December 31, 2021, with the rest due by December 31, 2022.

We anticipate further guidance on the above new provisions in the coming weeks.

The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.