What Does It Mean to Extend Your PPP Covered Period From 8 Weeks to 24 Weeks?
On June 8, 2020, the Paycheck Protection Program Flexibility Act was signed which allows for more flexibility for small businesses participating in the Paycheck Protection Program. Our Mid-MO CPA firm is here to give you more information on this in this week's blog. If you end up having any questions about what you are about to read, please give us a call at Wilson Toellner CPA. Our CPA firm in Central MO consists of four offices throughout Mid-MO, one in Sedalia, Marshall, Camdenton, and Lake Ozark. All phone numbers can be found on our website at www.WTCPA.com.
The bill will allow more time and flexibility for small businesses to keep their employees on payroll and continue operations by extending the covered period for loan forgiveness from eight weeks to 24 weeks. Borrowers have the flexibility to keep the eight weeks covered period if they already received their PPP loans.
If you opt for the 24 weeks covered period below is where you will receive additional flexibility:
Other provisions of the PPP Flexibility Act are:
We understand that this is a lot of information to take in at once. However, it's important that small business owners understand this and our CPAs in Central Missouri want to help you however we can. Again, if you have any questions on any of this, please give us a call. Our phone numbers are listed below. We are constantly posting relevant updates in regard to your taxes, PPP, Loan Forgiveness and so much more on our social media platforms. Be sure to follow us on our social media platforms listed below to stay up to date on the latest information.
The bill will allow more time and flexibility for small businesses to keep their employees on payroll and continue operations by extending the covered period for loan forgiveness from eight weeks to 24 weeks. Borrowers have the flexibility to keep the eight weeks covered period if they already received their PPP loans.
If you opt for the 24 weeks covered period below is where you will receive additional flexibility:
- The amount of forgiveness attributable to one individual is greater under the 24 week covered period than it is under the eight week covered period.
- For employee compensation the 24 weeks covered period maximum loan forgiveness is $46,154, which is 3 times that of the maximum under the 8 weeks covered period, or 24 weeks out of an annual 52 weeks of annual wages.
- For self-employment earnings (taxpayer filing a Schedule C or Schedule F) the 24 week covered period maximum is $20,833.33, which is 2.5 times annual self-employed earnings, capped at $100,000. The same 3 times theory was not extended to self-employment earnings in order to align with the original purpose of the CARES Act, which was protection of the paycheck of employees.
- Raising the minimum term of the PPP loans from two years to five years for all loans made on or after June 5. For loans made prior to June 5, both the borrower and lender must agree to extend the terms to five years.
- The 75% payroll requirement for forgiveness drops to 60%.
- The application deadline to receive PPP funding remains June 30.
We understand that this is a lot of information to take in at once. However, it's important that small business owners understand this and our CPAs in Central Missouri want to help you however we can. Again, if you have any questions on any of this, please give us a call. Our phone numbers are listed below. We are constantly posting relevant updates in regard to your taxes, PPP, Loan Forgiveness and so much more on our social media platforms. Be sure to follow us on our social media platforms listed below to stay up to date on the latest information.
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