After hours on Wednesday, June 3 the Senate unanimously passed the Paycheck Protection Flexibility Act (link) which grants extension and relief measures for those who received PPP loans. This is expected to be signed into law by the President shortly.
The following is a summary of the legislation’s main points compiled by the AICPA:
- PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
- The payroll expenditure requirement drops to 60% from 75%.but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met.
- Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
- The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
- Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
- The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.
You can access the PPP Loan Forgiveness Application, instructions and worksheets here (link).
The AICPA has provided a thorough and free loan forgiveness Excel calculator which is updated as guidance is released, which can be found here (link)
We are available to discuss this newly released information. Please call us at 203-852-7088 or email if you have questions.
This PPP loan guidance and information continues to change on a daily basis and as it does, we will keep you up to date.
We at Francis S. Infurchia & Company are working remotely starting today, March 23. While we have closed the physical office to visitors and are eliminating in-person meetings for the time being we remain fully operational and we are available virtually and by phone and email. If you haven’t already, and are able to, please scan and electronically send all tax documents to us- we can provide a secure portal for you to upload this information.
Over the weekend, the IRS extended the tax filing and payment deadlines from April 15 to July 15. This extension of time applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax. In addition, it appears that Q1 2020 estimated tax payments (normally due on 4/15) are included in this relief. Click here for the IRS announcement
The CT Department of Revenue Services is following the IRS tax deadlines and in addition, has included the Q2 2020 estimated tax payment deadline (normally due on 6/15) in the 90 day extension to July 15. Click here for the CT press release
To check on your individual state’s updated tax filing deadlines you can click here (updated daily).
We hope you stay safe and healthy during these uncertain times. Please let us know if you have any questions.
We hope you are staying safe and healthy. Today, we are writing to you regarding the coronavirus as it relates to the upcoming tax deadlines for the IRS and CT. During the last few weeks, we have been contacting our state and federal representatives, senators and lobbyists to request tax filing and payment relief due to the unprecedented disruptions and challenges caused by the spread of this virus. Finally, last night (Sunday 3/15) Connecticut’s Gov. Lamont held a press conference in which he extended CT state tax filing and payment deadlines for the 2019 partnerships and S-corps. Additionally, our governing body, the AICPA, issued a statement saying that they expect the IRS to extend the April 15 personal tax filing deadline by possibly 90 days and waive penalties and interest associated with payments for most taxpayers. CT DRS Press Release
During this time of social distancing, we ask our clients to please make phone or virtual consultation appointments. If you are able to, please send us your tax documents electronically (we can send you a secure upload link) or mail them to us as our office is currently closed to visitors.
We are being faced with a turbulent financial time. The SBA (Small Business Administration) should have liquidity to make loans to Connecticut businesses to pay for expenses incurred as a result of distress caused by the coronavirus. Please read this for instructions on how to apply for aid.
Below is a chart with the upcoming proposed and extended common filing deadlines. We will update you when we receive more guidance and final filing and payment deadlines from the IRS.