FEDERAL UPDATE
PPP Round One Forgiveness and PPP Round Two: What’s New? BY NATALIE ROONEY
In March 2020, the early days of the COVID-19 pandemic, the Coronavirus Response and Relief Supplemental Appropriations Act (CARES) provided some relief for businesses, dispersing more than $525 billion through the Paycheck Protection Program (PPP).
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ow, while forgiveness of PPP round one is underway, business owners are getting another chance at $284 billion worth of potentially forgivable loans through PPP round two, aimed at keeping companies alive and employees on payrolls during the ongoing coronavirus pandemic. Business owners who received a loan last year and fully used those funds on eligible expenses may be eligible for a second loan if they meet certain requirements for size, revenue decline, and other criteria. This time, the loans cover more business expenses, are open to a wider range of businesses including destination marketing groups, newsgathering operations, and 501(c)(6) organizations (subject to certain restrictions). And, they come with the assurance that approved expenses paid for by the loan will be tax-deductible.
The expanded eligibility could provide much needed relief for Colorado businesses and organizations, given the Centennial State’s reliance on tourism. A special provision exists for hoteliers, food and beverage operators, and other entities with an NAICS code that begins with 72 (Food and Accommodation Services) which have been especially hard hit by the pandemic to receive a higher loan amount based on average monthly payroll than in the first round of PPP. The expanded eligibility could provide much needed relief for Colorado businesses and organizations, given the Centennial State’s reliance on tourism, says Lisa Simpson, CPA, CGMA, AICPA Vice President – Firm Services. “Expanded eligibility, expanded eligible costs, and new categories of costs that borrowers can use toward forgiveness are all good news,” she says. “For example, retailers who might have installed plexiglass shields can now use those expenses for loan forgiveness.” ROUND ONE FORGIVENESS UNDERWAY One of the key roles CPAs have played over the past year has been helping clients apply for PPP funds. Now, the work is in figuring out how and when to file for forgiveness. On Jan. 12, 2021, the Small Business Administration (SBA) announced it had granted nearly 85 percent of the applications for PPP loan for18
NewsAccount | March/April 2021
