The Protection Flexibility Act of 2020 that was signed by the president earlier this month helped clarify some items related to the Paycheck Protection Program. However, it also brought a wave of many other unanswered questions. The Department of Treasury, through the Small Business Administration, has addressed many of these questions. Most notably, they have released the following:
- New EZ Loan Forgiveness Application
- Updated Loan Forgiveness Application and Instructions
- New Interim Final Rule on revisions to the Third and Sixth Interim Final Rules
Important changes & clarifications made in these documents include:
- 24 week covered period has salary limitations for owner compensation equal to 2.5 months worth of 2019 compensation capped at $20,833.
- Owner health insurance should not be included as eligible costs, in theory they are already included in their compensation.
- 24 week compensation (for non-owners) may not exceed an annual salary of $100,000, as prorated for the covered period (24 weeks – $46,154, 8 weeks – $15,385)
- FTE Reduction Safe Harbor can be met at December 31, 2020 or the date the application is submitted
- Salary/Hourly Wage Reduction Safe Harbor can be met at December 31, 2020 or the date the application is submitted
You can find the new guidance and the latest information on the Treasury’s website:
https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses
These details and more will be covered in a future webinar session of our Forgiveness Friday series. Stay tuned for further details.
There are certain to be more updates and changes. You can always click here for more COVID-19 resources relating to the above information https://rpbcpa.com/covid-19-support/ as we will do our best to keep it updated with information we think is useful.