The deadline to apply for a Paycheck Protection Program loan is Aug. 8. Congress is continuing to work on another COVID-19 relief package that could extend the deadline, but a deal is far from certain.
The deadline to apply for a Paycheck Protection Program (PPP) loan is Aug. 8. Congress is currently negotiating another potential COVID-19 relief package that could further extend that deadline, but a deal is far from certain as Democrats and Republicans remain far apart in their demands.
Earlier this week, the Big “I" joined a number of business organizations in sending a letter to congressional leadership encouraging them to include a technical correction addressing the tax treatment of loan forgiveness under the PPP in the latest COVID relief package.
When the PPP was adopted as part of the Coronavirus Aid, Relief, and Economic Security (“CARES") Act, Congress made clear that any loan forgiveness under the program would be excluded from the borrower's taxable income. However, the publication of IRS Notice 2020-32 effectively overturned this policy by denying these borrowers the ability to deduct the same expenses that qualified them for the loan forgiveness. The Big “I" strongly supports ensuring that all PPP loan forgiveness is excluded from taxable income.
As negotiations on the latest COVID-19 package continue, the Big “I" weighed in on another PPP related topic this week as the association again joined forces with others in the business community to try to shape policy related to the PPP. This time the Big “I" sent a joint letter to Senate Leaders Mitch McConnell (R-Kentucky) and Chuck Schumer (D-New York), as well as the Committee on Small Business and Entrepreneurship Chairman Marco Rubio (R-Florida) and Ranking Member Ben Cardin (D-Maryland) regarding “second draw" PPP loans.
Current drafts of the next round of COVID-19 recovery legislation would require small businesses applying for a second PPP loan to have suffered a 50% decline in revenue. The letter asks that the 50% requirement be lowered to 20% so that additional small businesses that were adversely impacted by the pandemic could be eligible for a second PPP loan and loan forgiveness.
As negotiations on a COVID-19 relief package continue in the coming day and weeks, the Big “I" will continue to provide updates on important developments in the News & Views e-newsletter.
Wyatt Stewart is Big “I" senior director of federal government affairs.
