02/09/2021
Blog Post #2
February 9, 2021
Second Round of PPP
As you are probably aware, there is now a second round of PPP (Payroll Protection Program) loans available; however, the rules have changed slightly for the second loan as compared to the first.
There are three new eligibility requirements for the second loan. First, your company must have 300 or fewer employees. Second, all of your first loan must have been used on payroll, rent, utilities or mortgage interest, or you must have plans to use the loan for these things. Third, you company must have had at least one quarter in 2020 in which gross receipts were reduced by at least 25% as compared with the same quarter in 2019.
Another new change is that, for hotels and restaurants, the amount they will receive for the loan is 3.5 times their monthly payroll, whereas with the first loan they only received 2.5 times monthly payroll.
An additional change is that the acceptable uses of the PPP loan have increased. They now include items such as property damage, operations expenses, supplier costs and worker protection expenditures.
The final change is that the Wisconsin tax treatment of round 2 of the PPP is the reverse of that of round 1: with round 1, the forgiven loan did not need to be reported as Wisconsin income, but the expenses paid with the loan could not be deducted; with round 2, the loan does need to be reported as Wisconsin income but the expenses paid by the loan can be deducted. (As with round 1, forgiven loans will not count as federal income for round 2.)
The deadline for applying for PPP round 2 is March 31, 2021. Most local banks are administering the second PPP, so contact your local bank to get started with your application.
If you have any questions about this or any other financial matter, don't hesitate to reach out to us.
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