Developing legislation may impact your forgiveness process
By now, many of you reading this post will have fully exhausted your Paycheck Protection Program (PPP) funds and may have received an email from your bank indicating their “portal” is open and ready for your PPP forgiveness application.
A common question we’ve received in the last week is “should I apply for forgiveness right now?”
There are multiple factors that could affect the way you could apply for forgiveness, many of which are currently up in the air. Both the House and the Senate have agreed, in principle, that PPP loans under $150,000 would be automatically forgiven if the borrower would sign a one-page attestation agreement stating that the PPP proceeds were used for the forgivable expenses outlined in the CARES Act.
It is also rumored that loans between $150,000 to $2,000,000 may be automatically forgiven if the borrower signs a two-page attestation agreement. We don’t know whether this will get signed into law or not as Congress is “on break” right now and won’t return until September.
There is also talk that there may be another stimulus bill that gets passed and it is likely this forgiveness will be included in this, however, it’s not guaranteed they will agree on any new relief legislation.
Since there is a possibility that Congress may not agree on the automatic forgiveness, we have been working on our own PPP forgiveness portal. We haven’t opened this to clients yet as we are awaiting on deciding action from Congress on any new legislation that would affect the forgiveness process.
If Congress does not pass new legislation, then it is highly likely you will be able to apply for forgiveness by submitting:
- Your payroll for the covered period
- Supporting documentation for rent, pension funding, utilities or mortgage interest
Due to the information we have today, we are advising clients to hold off on applying. Now that the extended covered period is 24 weeks, most do not expire until mid-October. We feel we will have more information before that time.
If you would like to be prepared once your PPP money is fully exhausted, we suggest working with your payroll company to run the reports that you will need for your covered period.
Additional CARES Act Update: The deadline to apply for Health & Human Services (HHS) stimulus funds has been extended to September 13, 2020. For details and how to qualify, please revisit our blog post on the topic. For additional questions or concerns, contact your planning team.
