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Important Changes to PPP Loan Forgiveness

June 05, 2020

The Paycheck Protection Flexibility Act with key provision changes including tripling the time allocated for small businesses and other PPP loan recipients to spend the funds and still qualify for forgiveness of the loans has been passed by the House and the Senate with the President expected to sign it into law. Below are highlights of the important changes:

  • PPP borrowers can choose to continue with the 8-week period or they may expand it to 24 weeks of expenses for determining the amount eligible for forgiveness. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
  • The payroll expenditure requirement that 75% of the loan be used for payroll expenses has been dropped to 60%. This is a cliff however, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven.
  • The deadline for restoring workforce and wages to pre-pandemic levels has been extended to December 31 instead of the original June 30 deadline.
  • Exceptions were put into place for those businesses that do not restore their workforce to pre-pandemic levels by the deadline to still receive full forgiveness:
    • Employees can be excluded from the calculation if the employer made a good faith effort to rehire at pre-pandemic hour and wage levels but the employee turned down the offer.
    • Employers who are unable to find qualified employees to hire or are unable to restore their operations due to the pandemic (Feb. 15, 2020) levels may adjust.
  • The term for repaying the PPP load has been extended to 5 years at 1% interest instead of the original 2-year term.
  • Payment of the employer’s share of FICA taxes can be extended for 2 years with half due in 2021 and the remainder due in 2022.

If you have questions or would like to further discuss, please call Perry Barnett, CPA, at (770) 287-7800 or email