The House has passed the Paycheck Protection Program (PPP) Flexibility Act of 2020 (H.R. 7010) which provides more flexibility for participants in the PPP program, including allowing those participants to defer the payment of certain payroll taxes that the CARES Act prevented them from deferring.
The vote was 417-1.
Deferral of tax payment. The CARES Act (P.L. 116-136, the Act) contains a provision, Act Sec. 2302, that defers the payment of 50% of certain payroll taxes until Dec. 31, 2021 and defers payment of the remaining 50% until Dec. 31, 2022. The Act provides an exception to the above rule; under that exception, these deferrals don’t apply to any taxpayer which has had indebtedness forgiven under Act Sec. 1106 with respect to a loan under Small Business Act Sec. 7(a)(36), as added by Act Sec. 1102, or indebtedness forgiven under Act Sec. 1109.
H.R. 7010 would eliminate the above exception and thus would allow taxpayers with these forgiven loans to defer payment of the payroll taxes.
H.R. 7010 also would:
1.) Allow businesses 24 weeks instead of eight weeks to use the loan money;
2.) Eliminate restrictions limiting non-payroll expenses to 25% of loan proceeds;
3.) Require loan recipients to comply with COVID-19 safety standards;
4.) Eliminate restrictions that limit loan terms to two years; and
5.) Extend the rehiring deadline.