BFJ Financial Group recognizes that the COVID-19 pandemic has had an economic impact on all of our lives and we are committed to helping you work through these unprecedented times by providing you with timely information regarding economic topics. As you probably are aware, on June 5 the President signed the Payroll Protection Program Flexibility Act of 2020 (PPPFA). This bill is a straight-forward amendment of the CARES Act Paycheck Protection Program. The major provisions of the bill are as follows:
The bill is effective retroactive to March 27, 2020, the date the CARES Act was passed. Businesses that already received a PPP loan can take advantage of these relaxed requirements. Businesses that received a PPP loan prior to the date of this amended bill may still elect to use an 8-week forgiveness period.
Expenses paid with the loan proceeds are not deductible at this time. Therefore, until a determination has been made any expenses paid with the PPP loan proceeds will be nondeductible and in essence the loan will be taxable income to the borrower.
If you have questions regarding the provisions of the PPPFA, please do not hesitate to contact us. We are available to assist you.
We will continue to update you on this and other coronavirus-related economic issues in the coming days as more information becomes availableBack to Tax News