Paycheck Protection Program Loan Forgiveness
This letter is an update to the Paycheck Protection Program (“PPP”) based on the PPP Flexibility Act of 2020 (“PPP Flexibility Act”).
On June 5, 2020, President Trump signed into law the PPP Flexibility Act.
The following is a summary of the major changes to the PPP based on the PPP Flexibility Act and PPP Loan Forgiveness:
Payroll Tax Deferral Plan
On August 28, 2020, the Department of Treasury and Internal Revenue Service issued a guidance on the payroll tax deferral that was ordered by President Trump’s memorandum on August 8, 2020.
Under the guidance, payroll tax relief is available for employers and is applicable to wages paid from September 1, 2020 through December 31, 2020. Employers are allowed to defer withholding, deposit and payment of the employee’s portion of Social Security tax on wages
below $4,000 during any biweekly pay period. The due date for withholding and payment of these taxes is postponed until the period beginning January 1, 2021, and ending on April 30, 2021. Deferred payroll taxes not paid during this period will be subject to interest and
There are discussions of potentially forgiving the deferred payroll taxes, although we are not sure of what the outcome will be at this point, we advise you to take advantage of the payroll tax deferral.
See attached link to the guidance (Notice 2020-65).
Mike Song, CPA
CC: Steven Kang, CPA