Last week brought great news for practice owners who haven’t spent all their PPP money yet. On Thursday May 27th, the House of Representatives passed a bill making the following changes to the PPP forgiveness calculation:
- Extends the 8-week Covered Period to 24 weeks, giving small practice owners triple the time to spend their PPP money and still qualify for full loan forgiveness.
- Gives employers until 12/31/20 (versus the current 6/30/20 deadline) to staff up to 2/15/20 levels to meet the Safe Harbor and qualify for full loan forgiveness.
- Reduces the percentage of PPP money to be spent on payroll costs from 75% to 60%.
The bill also:
- Extends the repayment term for unforgiven PPP funds (which will include the EIDL Grant of $1k per employee) from two years to five years.
- Allows businesses to defer paying their employer matching Social Security taxes until 2021 and 2022 even if they receive a PPP loan.
THESE CHANGES HAVE NOT YET BEEN ENACTED INTO LAW YET. Now it’s up to the Senate to act on this bill. Hopefully the new rules will be enacted by the end of the week.
Based on this recent development and the likelihood that the PPP forgiveness rules will change for the better, you might consider utilizing unemployment to the fullest for you and your staff as you continue to ramp up your practice. And if you haven’t applied for the PPP yet, please consider doing so now.