PPP Extended, Again

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AAFCPAs would like to make clients aware that the President’s Paycheck Protection Program (PPP) Extension Act of 2021 extends the program again, to May 31* instead of the current March 31 deadline.

*The bill extends the program through June 30, 2021; however, for the final 30 days of the program, no “new” applications may be accepted. From June 1 until June 30, the Small Business Administration (SBA) may only process applications submitted prior to June 1, and it may not accept any new loan applications.

What May This Mean for You?

  • You have more time to apply for a first-round forgivable loan if you have not done so already.
  • You have more time to spend through, on eligible expenses, PPP1 so that you may apply for PPP2, especially for those organizations who recently became eligible through PPP changes (e.g. nonprofits).

The American Rescue Plan Act (ARPA) Expands PPP Eligibility to Include:

  • Additional tax-exempt nonprofits (whose lobbying activities do not comprise >15% of activities):
    • 501(c)(5) labor groups
    • 501(c)(7) social clubs
    • 501(c)(8) fraternal benefit societies
    • Religious groups that are generally banned from SBA rules
  • Internet publishing organizations assigned a North American Industry Classification System (NAICS) Code of 519130 and engaged in the collection and distribution of local or regional and national news and information.
  • COBRA premium assistance as an allowable payroll cost under the PPP.
  • Nonprofit organizations will now be eligible if they employ no more than 500 employees per physical location for PPP Round 1, and 300 employees per physical location for PPP Round 2.
  • A previous release by the SBA also announced that Schedule C borrowers may use gross income (line 7), rather than net income (line 31).

MA Conforms to Fed Treatment of PPP Loans

Governor Baker signed, in part, the long-anticipated COVID-19 relief bill. Baker sent amendments back to the House for consideration, which may affect the state’s Paid Family and Medical Leave program. The part of the legislation which was signed includes language to conform to the federal tax treatment of PPP loans forgiven in 2020, EIDL advance grants received in 2020, and the SBA debt relief payments made in 2020. The bill also includes unemployment income forgiveness up to $10,200 for Massachusetts residents whose household incomes are at or below 200% of the federal poverty level. Read more about the legislation here>>.

AAFCPAs’ COVID-19 Task Force is dedicated to following emerging legislation and FAQs, understanding how this impacts our clients, and educating our 240+ person team on opportunities for proactive outreach.

If you have questions, please contact your AAFCPAs Partner.