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U.S. Senate Passes the Paycheck Protection Program Flexibility Act


U.S. Senate Passes the Paycheck Protection Program Flexibility Act

Great news for those who received Paycheck Protection Program (“PPP”) funding!  Last night the U.S. Senate passed the House version of the Paycheck Protection Program Flexibility Act, and the President is expected to sign it into law.  The changes focused around extending the time period in which funds must be spent, as well as changing the threshold for how much of the spending needs to be related to payroll.  Main highlights of the bill are:

  • Borrower has the option to extend the original 8-week period to 24 weeks or until December 31st, whichever comes first.  A borrower may elect to stay with the 8-week period.  Since a lot of business have not been able to open to full capacity, the extension will make it easier for many borrowers to reach full, or almost full, forgiveness. 
  • The previous Safe Harbor deadline of June 30th is now extended to December 31st.  Similar to the original calculation, there are a few exceptions:
    • Employees who turned down a written offer to be rehired during the Covered Period or Alternative Payroll Covered Period can be excluded.
    • Borrowers are allowed to adjust the FTE calculation if they could not find qualified employees or were unable to restore business operations to Feb 15, 2020 levels due to COVID-19 related operating restrictions. 
  • The payroll expenditure requirement has dropped from 75% to 60%.  This does come with a catch, however. 
    • Borrowers must spend 60% of their funding on payroll or none of the loan will be forgiven.  The House is still discussing this change and potentially looking to make this a sliding scale in the future, similar to the original 75% calculation.
  • Repayment is over 5 years as opposed to 2 and interest remains at 1% for loans made on or after the bill’s enactment date.  However, lenders and borrowers can mutually agree to modify the maturity terms of prior-disbursed PPP loans.
  • Businesses with PPP loans can also delay the payment of their payroll taxes, under a separate provision of the CARES Act.  This was previously prohibited under the CARES Act.
  • Deferral period for payments on any remaining loan balance has been extended to the earlier of the forgiveness date or 10 months after the end of the 24-week period.

These changes are hot off the press and additional guidance around these changes are expected. CironeFriedberg is here to help you and your business through this fast changing environment.  Please reach out to your representative or anyone at CironeFriedberg for guidance.


We are focused on your success. If you need assistance or have any questions about the information shared in this newsletter, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford), or email us at

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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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