Part 8 – Paycheck Protection Program (PPP) Loan Forgiveness Terms

The IRS and the SBA sent further clarification through its FAQs that the employers share of SSA can be deferred until the date The PPP loan is formally forgiven by the lender without interest or penalty. The forgiveness determination could be several weeks after the 8 week period  has eclipsed. YOU MUST CONTACT YOUR THIRD PARTY PAYROLL PROVIDER NOW.

Deferral of employment tax deposits and payments through December 31, 2020 FAQ 4

Can an employer that has applied for and received a PPP loan that is not yet forgiven defer deposit and payment of the employer’s share of Social Security tax without incurring failure to deposit and failure to pay penalties?

Yes. Employers who have received a PPP loan may defer deposit and payment of the employer’s share of Social Security tax that otherwise would be required to be made beginning on March 27, 2020, through the date the lender issues a decision to forgive the loan in accordance with paragraph (g) of section 1106 of the CARES Act, without incurring failure to deposit and failure to pay penalties. Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer’s share of Social Security tax due after that date. However, the amount of the deposit and payment of the employer’s share of Social Security tax that was deferred through the date that the PPP loan is forgiven continues to be deferred and will be due on the “applicable dates,” as described in FAQs 7 and 8.

Please contact your BKM Sowan Horan team member with any questions.