1-Safe Harbor Deadline Pushed To May 18, 2020 -

FAQ 47 extends the FAQ 43 Safe harbor deadline to May 18th. FAQ 43 permitted PPP borrowers to avoid a certification of eligibility penalty by returning borrowed funds on or before May 7, 2020. This date was later extended to May 14th. On May 14th, Treasury issued FAQ 47 further extending the Safe Harbor Deadline to May 18th. The safe harbor provides an opportunity for borrowers who received PPP loans to return them if they are not able to make a good-faith certification of the necessity of their loan requests.

2-Tax Partnerships and Seasonal Businesses Permitted Time to apply to Increase PPP loans to Reflect Later Guidance.

A new interim final rule permits partnerships and seasonal employers to apply for increased PPP loans. The new rule relates to partnerships that submitted their loan applications prior to the issuance of April 14th guidance. Under the April 14th interim rule, the self-employment income of general active partners was permitted to be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by, or on behalf of, the partnership. Tax partnerships that submitted PPP applications without including partner self-employment income most likely did not receive the maximum amount of PPP loans for which they would be eligible based upon the April 14th guidance.

An unrelated interim final rule issued April 28th established an alternative criterion for calculating the maximum loan amount for PPP loans issued to seasonal employers.