An Interim Final Rule was issued by the Small Business Administration (SBA) that seeks to clarify various areas of the Paycheck Protection Program (PPP). This comes after the PPP Flexibility Act ensured the payback period be extended to 24-weeks, as well as reducing required payroll costs from 75% to 60%, among numerous changes.
PPP Flexibility Act Interim Final Rules
The current IFR makes a few technical changes to prior IFR, the the SBA has provided the following new guidance:
- For the 24 Week Period
- There is a $100,000 cap on cash compensation under the new 24-week covered period shall be applied as 24/52. This results in a cap of $46,154 for each employee. This IFR has capped the cash compensation for sole proprietors, independent contractors and self-employed individuals at the lesser of 2.5 months of 2019 net profit (2.5/12) or $20,833, under the 24-week covered period.
- For the 8 Week Period
- For borrowers who opt to use the 8-week period, the cap remains at $15,385 (8/52) per employee. For sole proprietors, independent contractors or self-employed borrowers using the 8-week covered period, this cap remains at the lesser of 8/52 of 2019 net profit or $15,385.
New PPP Loan Forgiveness Applications
The SBA also published two new loan forgiveness applications:
- A revised standard form application, and
- The new EZ loan forgiveness application (3508EZ)
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