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  1. Home
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  3. Fixes to Paycheck Protection Program on the Way?

Fixes to Paycheck Protection Program on the Way?

Posted by Sarah Russell on May 21, 2020

Sarah Russell Sarah Russell

As small business owners begin to navigate the loan forgiveness portion of the Paycheck Protection Program it has become clear many will not be able to achieve full forgiveness because they will not be able to spend all of the funds in an 8-week Covered Period.  In addition, business owners are hesitant to bring employees back on payroll while they are closed or have little work for them to do.  Many have struggled with the idea that at the end of the 8-week window they will have a debt that is required to be paid back in 2 years.

Help may be on the way!  More than one bill has been introduced in the House, including the HEROES Act, to add flexibility to the program, however, until now there has not been bipartisan support.   News coming out of Washington now indicates there is bi-partisan support to fast-track legislation that provides the flexibility so many have been hoping would come.  Nancy Pelosi announced yesterday that the House would vote next week on stand-alone legislation changing the original terms of the program.  Changes expected include:

  • Extending the Covered Period – it is unknown how long of an extension, we have heard 12, 16 and even 24 weeks
  • Eliminate the 25% non-payroll expense restriction for forgiveness – this will help businesses with higher rent and utility costs
  • Extend the loan repayment terms beyond the 2-years – this will require amended loan agreements as many loan documents have already been signed
  • Extending the rehiring deadline past June 30th – since many unemployment insurance programs are offering benefits at higher rates, businesses are struggling to bring back employees.

Marco Rubio announced yesterday that he believes such legislation will have the full support of the Senate if it is in fact a stand-alone bill and there is nothing added to it, although the Senate adjourned last night and isn’t expected to return to vote on anything until June 1.  Personally, I hope they also include a provision that all expenses paid with forgivable funds will be deductible. We will keep you posted as we learn more.

The above represents our best understanding and interpretation of the material covered as of the date of this post. Things are moving at a rapid pace, and as such, information is subject to change. This information is provided for informational purposes only and is not intended to be a substitute for obtaining accounting, tax, or financial advice from an accountant.

Our team is always ready to help.

Please contact us for more information.

Sarah Russell

Sarah Russell

Shareholder, Tax

Contact Sarah   |   Read Sarah's bio

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Fixes to Paycheck Protection Program on the Way?

Posted by Sarah Russell on May 21, 2020

Sarah Russell

As small business owners begin to navigate the loan forgiveness portion of the Paycheck Protection Program it has become clear many will not be able to achieve full forgiveness because they will not be able to spend all of the funds in an 8-week Covered Period.  In addition, business owners are hesitant to bring employees back on payroll while they are closed or have little work for them to do.  Many have struggled with the idea that at the end of the 8-week window they will have a debt that is required to be paid back in 2 years.

Help may be on the way!  More than one bill has been introduced in the House, including the HEROES Act, to add flexibility to the program, however, until now there has not been bipartisan support.   News coming out of Washington now indicates there is bi-partisan support to fast-track legislation that provides the flexibility so many have been hoping would come.  Nancy Pelosi announced yesterday that the House would vote next week on stand-alone legislation changing the original terms of the program.  Changes expected include:

  • Extending the Covered Period – it is unknown how long of an extension, we have heard 12, 16 and even 24 weeks
  • Eliminate the 25% non-payroll expense restriction for forgiveness – this will help businesses with higher rent and utility costs
  • Extend the loan repayment terms beyond the 2-years – this will require amended loan agreements as many loan documents have already been signed
  • Extending the rehiring deadline past June 30th – since many unemployment insurance programs are offering benefits at higher rates, businesses are struggling to bring back employees.

Marco Rubio announced yesterday that he believes such legislation will have the full support of the Senate if it is in fact a stand-alone bill and there is nothing added to it, although the Senate adjourned last night and isn’t expected to return to vote on anything until June 1.  Personally, I hope they also include a provision that all expenses paid with forgivable funds will be deductible. We will keep you posted as we learn more.

The above represents our best understanding and interpretation of the material covered as of the date of this post. Things are moving at a rapid pace, and as such, information is subject to change. This information is provided for informational purposes only and is not intended to be a substitute for obtaining accounting, tax, or financial advice from an accountant.

Our team is always ready to help.

Please contact us for more information.

Sarah Russell

Shareholder, Tax

Contact Sarah   |   Read Sarah's bio

related news

Honoring International Women’s Day

In honor of International Women’s Day, I’d like to take a moment to recognize the talented women who have helped build our outstanding reputation within the business community – both…

Read full story

How to Calculate R&D Tax Credits

As we’ve seen in the first two installments of this series, business owners often miss out on the R&D tax credit opportunity and the bottom-line infusion it can provide. Many…

Read full story

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Without a doubt, this year will be interesting for Mexico. To start, it’s an election year and we all know what that means…a lot of uncertainty. As the global pandemic…

Read full story

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The R&D tax credit is one of the most overlooked opportunities to boost your bottom line. Many business owners fail to claim it under the mistaken belief that they’re not…

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Clayton & McKervey Launches The Sound of Automation Podcast

Media Contact: Denise Asker, dasker@claytonmckervey.com; 248.936.9488 Southfield, Mich.—February 17, 2021—Clayton & McKervey, a certified public accounting and business advisory firm helping growth-driven companies compete in the global marketplace, is excited…

Read full story

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  • Sarah Russell
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