Good Evening! Great news coming from Congress today.
Negotiations on Capitol Hill are pending a final vote, however this is what we are hearing now regarding the new Bill going through the house today that is expected to pass in tomorrows session.
Expenses paid with existing PPP loans will be deductible for income taxes for 2020. This is a huge win for business owners to plan for their 2020 income tax obligations. This will also apply to the new round of PPP loans (PPP2) that are possible for qualifying business owners.
Forgiveness filing for borrowers with loans below $150,000 will be simplified to a single page attestation of spending the money in accordance with the loan provisions. While the SBA and Internal Revenue Service reserve the right to audit or spot check documentation, this will provide a majority of you with the ability to achieve full forgiveness very simply in comparison to what was anticipated.
PPP2: $284 Billion has been allocated for a new round of PPP funding. This has additional eligibility compared to the first round and includes 25% reduction in gross revenue for any calendar quarter of 2020 vs. same quarter in 2019 to be eligible to apply. Restaurants are eligible to receive 3.5 x average monthly payroll vs. the 2.5 average monthly payroll for other businesses. There is now a $2million max loan amount for new PPP loan funds.
They are expecting these PPP2 applications to go live sometime in early January.
Stay tuned for more updates as they become available.