On June 5, 2020, the President signed into law the Paycheck Protection Program Flexibility Act of 2020 which makes additional changes to the loan forgiveness requirements under the original SBA Payroll Protection Program Loan. Expect more clarifying regulations over the coming days, and an updated loan forgiveness application is certainly forthcoming. In short, here is how the program has changed (yet again):
1) The first allows loan forgiveness to be calculated without regard to a reduction in full-time equivalent employees if the employer is able to document:
i) an inability to rehire individuals who were employed on February 15, 2020, and
ii)an inability to hire similarly qualified employees for unfilled positions before December 31, 2020.
2) The second allows loan forgiveness if the borrower, in good faith, is able to document an inability to return to the same level of pre-February 15, 2020, business activity due to compliance required by the CDC, OSHA, or the Secretary of Health and Human Services.
Stay tuned to the SBA website (which as of June 9, 2020, is not yet updated for the new changes to the law), and do your best to keep up with the constantly changing rules of the Payroll Protection Program Loans. Of course, if you have any questions, please give us a call at (757) 687-8888.
Nathan R. Olansen is a Shareholder in the law firm of Midgett Preti Olansen. His practice is focused on estate planning, probate and trust administration, IRS and state and local tax audit and tax collection cases, as well as individual and entity tax planning, asset protection and a variety of related transactional matters.
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