In the ever-changing landscape of our world due to COVID-19 we have some updates for you on the Cares Act, specifically on the Payroll Protection Program. Kyle Brennan is keeping his Business Services eye on the program and has discovered that the interpretation of the Bill seems to change DAILY.
Here is Kyle’s Update on the Payroll Protection Program:
A few days ago, I sent some information on how churches can participate in the Payroll Protection Program (PPP) for financial relief. The article included how to enroll, the documents needed to enroll and when the loan will have to be paid back if it is not forgiven. There have been several important updates since this article went out.
These updates are as follows:
- 1099’s cannot be included in the average 12-month payroll cost.
- Housing allowances are not included in the average 12-month payroll cost.
- 75% of the loan must be used for payroll costs. If a lower percentage is used, the difference will not be forgiven.
- Loan proceeds need to be used by 6/30/20 to be eligible for forgiveness of the loan.
- Loan payments (if not forgiven) must start after 6 months, not 1 year.
- The loan must be paid (if not forgiven) over 2 years, not 10 years.
Expect more information to come out on possible changes from what we think we know. Experts are still unpacking the legal requirements of this program. Here are a couple of sources for you to keep updated.