May 14, 2020 | Blog
The Small Business Administration last night extended the safe-harbor deadline for paying off Paycheck Protection Program loans until May 18. Early payment will exempt borrowers from questions as to whether they certified a "need " for the loans "in good faith." The extension was announced in new item 47 of their Frequently Asked Questions list.
The SBA extended the deadline, which had been today, after earlier exempting loans under $2 million from questioning of "good faith" certification of need.
The Treasury earlier announced that taxpayers returning PPP loan funds by the May 14 deadline would become eligible for the Employee Retention Tax Credit. It is likely that the IRS will adopt the new May 18 deadline, but their FAQ #79 has yet to reflect the new date as this is written.
Here is the text to new FAQ 47:
47. Question: An SBA interim final rule posted on May 8, 2020 provided that any borrower who applied for a PPP loan and repays the loan in full by May 14, 2020 will be deemed by SBA to have made the required certification concerning the necessity of the loan request in good faith. Is it possible for a borrower to obtain an extension of the May 14, 2020 repayment date?
Answer: Yes, SBA is extending the repayment date for this safe harbor to May 18, 2020, to give borrowers an opportunity to review and consider FAQ #46. Borrowers do not need to apply for this extension. This extension will be promptly implemented through a revision to the SBA’s interim final rule providing the safe harbor.
Related: Maximize PPP Loan Forgiveness
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