We can confirm that a new round of PPP funds will be coming out in the latest stimulus package passed by the House and Senate and waiting for President Trump’s signature as of 12/22/2020.
Today, December 23rd, it’s unclear whether President Trump will now sign it into law. He has left for vacation, and Congress is in recess.
Who will Qualify for Round 2 of PPP
Anyone who had a 25% revenue decline in any 2020 quarter compared with the same quarter in 2019 will qualify (also must have fewer than 300 employees and have or will have used the entire amount of their first PPP loan).
Here’s what we know about the current legislation:
- The first round of PPP and the second round of PPP will be tax-free, meaning no reduction of expenses or inclusion of the forgiveness in income is necessary. This has gone back and forth all year. We will keep an eye on this going forward and how the IRS plans to address reporting the loan’s forgiveness. It does appear at this moment that the PPP funds forgiven for both the first and second round used for qualified expenses will be tax-free.
- The “auto forgiveness” for the first and second round has been finalized. Under $150,000 will be auto-forgiven. We believe this means the forgiveness will be a one-page document, indicating the funds have been spent on payroll and confirm how many employees you had during the period of forgiveness. We will wait for the banks to address this with SBA. If you have already applied for forgiveness, you need to take no action. If you have not applied for forgiveness and were waiting for this update, wait a few more days/weeks until the SBA and banks have updated their portals to allow for this one-page quick forgiveness application.
Contact your bank for both round 2 and “auto forgiveness. Not today or next week, but in a few weeks after the banks have had a chance to open up funding for round 2. The correct course of action is to contact your business bank to answer your questions on applying for round 2. If you have questions regarding your qualifications for the second round and we handle your bookkeeping, we can quickly answer them. If we do not do bookkeeping for you and you do not have bookkeeping services currently in place for your small business, you will need to document how you can prove a loss of 25% revenue quarter over quarter. We can try and help you through this either with our firm or introduce you to a bookkeeper we trust.
Please feel free to share this email with businesses and contacts that are impacted by COVID and could use an additional round of PPP funds to help them through this difficult time.
Jeremy Klaven, CPA
#1 First Missouri Center, Suite 214
St. Louis, MO 63141
Office: (314) 720-8686