What’s Going on With PPP Loans and the IRS? The Latest Updates

During the original COVID-19 lockdown, the Coronavirus Aid, Relief, and Economic Security (CARES) Act delivered much-needed relief to businesses in the form of the Payment Protection Program (PPP). This granted forgivable loans to qualifying organizations in exchange for a promise to keep employees on payroll.

Now, a new round of PPP loans should lend businesses additional assistance as COVID continues to surge and ongoing restrictions limit profits for already struggling enterprises. These loans will look a bit different, however. Keep reading for the latest news on PPP funding — and insight into how it might impact your business.

Changes to PPP for 2021

The PPP drew quite a bit of criticism in 2020. Skeptics were angered by the many large enterprises that beat out smaller, needier businesses for funding. Others were unhappy about the initiative’s treatment of business deductions.

In an effort to address the biggest problems surrounding the original PPP stimulus, an amended version of the program has been implemented.

Stricter eligibility standards are now in place, so businesses with more than 300 employees can no longer secure funding. Borrowers now enjoy greater control over the loan’s covered period, with up to 24 weeks available for loan forgiveness purposes.

A variety of additional expenses can now be covered by forgivable loans, including worker protection, property damage, and more. Perhaps most notably, eligible businesses are able to claim deductions for qualifying expenses covered with funding from PPP loans.

The Future of the PPP

The latest changes to the PPP should provide plenty of relief to worried business owners. Still, given how often guidance has changed over the last few months, it’s important to take a cautious approach when seeking funds through this program.

Whether you’re thinking about taking advantage of the latest version of the PPP or still dealing with issues from the original program, it’s worth your while to seek support from a trusted tax resolution service. Contact the Highland Tax Group to learn more about your options as a small business in 2021.