On May 28, 2020, the House of Representatives passed the Paycheck Protection Program Flexibility Act, nearly unanimously (417-1). Most importantly this bill would extend the forgiveness period for PPP funds from 8 weeks to 24 weeks. Though the final time period is unknown, it appears very likely that the Senate will take up legislation that will agree with extending the time period for forgiveness. Indications from the AICPA support the belief that some extension will be given legislatively.
Though businesses which received PPP funds should continue their rigorous documentation related to the funds spent to support forgiveness, this presumptive legislative relief indicates there is no rush to complete the forgiveness application until final clear guidance is given. A worst-case scenario would be to prematurely file your forgiveness application only for the sands to shift one more time.
Further, due to this regulatory fluidity it would be wise to create documented management level plans to maximize forgiveness under the original 8-week window. Currently, the forgiveness application allows for payroll costs incurred (wages, bonuses, hazard pay, etc.) during the 8 weeks to count toward forgiveness IF they are paid on or before the next pay date subsequent to the end of the 8-week period. In the likely event that Congress creates the extension mentioned above, management’s plan may change to fit the new reality in which additional recurring expenses are eligible for forgiveness.
This information is for general guidance. If you have any specific questions, please reach out to our team at MWB if we can help in any way.