HR 7010 passed which came out of left field this evening after it was being blocked so let's go through it in detail since most of us didn't read it thinking it would change. Finally some good news. This doesn't quite track in the order of the bill, but oh well #taxtwitter
Any loan that isn't forgiven now has a 5 year minimum maturity term on it. SPOILER ART - there won't be much that you don't have forgiven so this is nice, but probably irrelevant
No payments on these loans until the "date on which the amount of forgiveness determined under Sec 1106 of the CARES Act is remitted to the lender." So that might be more than 6 months, just says they delay payments until you submit for forgiveness
If the borrower fails to apply for forgiveness within 10 months after the end of the CP they don't have to make payments until 10 months after the CP ends. This is odd, I have no idea who will fail to submit a forgiveness application, but let's move on.
Covered Period is 24 weeks from the date of origination. I'll just leave this here, let it simmer a bit. 24 weeks. That's like 168 days
You have until Dec 31st for the restoration of FTE for the FTE limitation. You also have until Dec 31st for the restoration of wages for the wage reduction limitation.
Big FTE exemption based on employee availability added in case you try to rehire people who had been employed Feb 15, 2020, but are unable to rehire them or to hire similarly qualified employees to fill those positions.
FTE exemption also if your business is unable to return to the same level of business activity because of CDC guidance.
Limitation on Forgiveness - to receive loan forgiveness you must spend 60% on payroll. This seems to be a cliff, spend 59% and you get no forgiveness. In reality who is unable to spend 60% on payroll if they give you 24 weeks to spend it? Worst case you pay them not to work.
APCP redone - biz that received PPP prior to HR7010 may elect to use a CP that is 8 weeks after the day they got the money.
Section 2302 the payroll tax deferral used to be prohibited if you had loan forgiveness on a PPP loan. Now it's allowed. So you can use the PPP to pay the payroll and also use the employer payroll tax deferral which is delaying payment until half Dec 2021 and half Dec 2022
In conclusion and in summary:
@threadreaderapp unroll
