Congress has passed new legislation in a bill of approximately 5,593 pages!!! If you received PPP loans, the new law is well received as the expenses paid with the PPP loans WILL be a deductible expense. Here is a quick summary of the features of the law that I believe will be most important to my clients:
- PPP loans will reopen until March 31
- Added more expenses that can be used for forgiveness
- Maximum loans now set at $2 million, down from $10 million
- Simplified loan forgiveness process for a) loans of $150,000 or less (one page form) and b) loans more than $150,000 and less than $2 million (less documentation to send in).
- End dates for safe harbors pushed back to September 30, 2020
- Second Draw PPP loans available to March 31
- Require 25% drop in revenue
- Must have spent all of PPP loan before getting the PPP2 loan
- Full deduction for expenses paid with PPP loan proceeds
- 100% meals deduction for 2021 and 2022
- 7.5% medical deduction limit extended
- And lots more (most non-tax, but some tax things are in there, especially extenders)
The states of New York and New Jersey have not yet indicated whether they will follow the new law or decouple and disallow the PPP loan expenses. Stay tuned. Regards
