Congress made changes to the PPP loans in the end of year Pandemic Relief Package. If you received a PPP loan four major changes impact you:
- The regular business expenses paid with the PPP proceeds will be tax-deductible.
- While only 40% of PPP proceeds can be used for non-payroll expenses, four new categories of non-payroll expenses qualify: operations expenses, supplier costs, worker protection expenses and covered property damage costs.
- If you received an EIDL grant, it is no longer required to be deducted from your PPP proceeds when calculating your PPP grant amount.
- The period for which expenses count toward your loan forgiveness can be from as little as 8 weeks to as long as 24 weeks.
- If you have used your PPP proceeds for covered expenses, you can apply for a “second draw” loan.
If you did not receive a PPP loan under the original program, it has been reopened as of January 11, 2021 and will continue until March 31, 2021 or until the funds are exhausted. Several changes have been made:
- Non-profits that are 501(c)(6) organizations are now eligible.
- You may qualify even if you took the Employee Retention Tax Credit.
- Publicly traded companies are no longer eligible.
- Group insurance premiums now count as payroll expenses for calculating the maximum amount of the loan.
- Seasonal employers have more flexibility in picking the 12-week lookback period.
For more information, CLICK HERE to see the U.S. Chamber of Commerce Guide to Small Business COVID-19 Emergency Loans.