U.S. Expands Benefits of Payroll Protection Program
WASHINGTON, DC — Kitchen and bath dealers and designers are among the businesses that could potentially obtain economic assistance from a new law that makes a series of changes to the government’s existing Payroll Protection Program.
The Paycheck Protection Program Flexibility Act, expands the loan-forgiveness period in the PPP, increasing the covered period from eight to 24 weeks and lowering the allowable percentage of funds directed to payroll from 75% to 60%.
Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, businesses are eligible to delay certain employer-paid payroll tax benefits. However, the CARES Act blocked businesses who have their PPP loan forgiven from availing themselves of this delay. With the prohibition now lifted, all businesses, regardless of PPP status, may take advantage of the payroll tax delay.
For payroll taxes due from March 27 through the end of 2020, employers and self-employed individuals may defer payment of the employer share of Social Security taxes they are responsible for paying. This allows employers and those who are self-employed to save temporarily on the employer’s 6.2% Social Security tax on wages. Employees must continue to submit their portion of the Social Security tax. Half of the deferred amount is due by Dec. 31. The balance is due by Dec. 31, 2022.