Withum COVID-19 Bill Update – 6/23/2020

June 23, 2020

Change to Forgiveness Process: As we all know, the Covered Period was recently changed to be either 8 weeks or 24 weeks, at the borrower’s election if the loan was issued before June 5th. This has opened the door to many companies obtaining full forgiveness of their loan. An issue that has often come up is that many borrowers are able to incur enough expenses to obtain full forgiveness within a period that is longer than 8 weeks but perhaps far shorter than 24 weeks. This has led to the question:  Do I need to wait the full 24 weeks before we apply for forgiveness?  

Up until now the answer was yes, however the IFR release has clarified that a borrower can apply for forgiveness at any time after or DURING their covered period. This will allow borrowers to get the process rolling and perhaps allow them to wrap up the forgiveness process prior to the end of the year.  

Update on Salary and Wage Reduction Rule: The IFR also indicates “If the borrower applies for forgiveness before the end of the covered period and has reduced any employee’s salaries or wages in excess of 25 percent, the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period.

This is meaningful because it indicates that you will need to account for salary reductions through your full covered period even if you apply for forgiveness early. As an example, if you reduced an employee’s salary in excess of 25% for the first 12 weeks of your covered period, when applying for forgiveness you need to assume that reduction will have been in place for all 24 weeks for purposes of the forgiveness calculation. No guidance was issued about what to do if there are FTE reductions during the covered period. 

The new IFR clarified many other points regarding the loan forgiveness process, and all of the salient ones are included in Withum’s 06/20/2020 webinar on loan forgiveness.  It will be posted on Withum’s website afterwards.

Reminder Section:  (what should I be doing):

  • Call your payroll company about claiming the payroll tax deferrals and employee retention credits that were made available in the CARES Act.
  • Talk to your payroll company about the qualified sick/family leave legislation (FFCRA, passed prior to the CAREs Act).
  • Consider speaking with your lender to discuss changes to terms of existing debt facilities. The banking system remains strong.
  • If you have already applied for the PPP, start forecasting how you intend to spend the funds and how to qualify for the highest amount of forgiveness possible.
Related Articles
As COVID-19 vaccines authorized by the Food and Drug Administration (FDA) for emergency use become more widely available, employers face the question of how to address their employees' vaccination status. Alston & Bird has issued a Labor & Employment Advisory on COVID-19 Vaccines: Seven Questions for Employers. In it, they review emerging legal and practical issues that all employers should consider as they make decisions about how to address this important matter.…
The Mechanical Contractors Association of America (MCAA), National Electrical Contractors Association (NECA), and Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) have aligned the MEP trades in a collaborative effort to bring to you and the construction industry the attached white paper, "Project-Specific Loss of Productivity Analysis Methodologies".…
The $2.3 trillion Consolidated Appropriations Act, 2021 (H.R. 133) provides badly needed COVID economic relief, construction market stimulus and a forward-looking prospect for market recovery in public sector infrastructure investments as the pandemic recedes. In a memo to the MCAA Government Affairs Committee, Chair Jim Gaffney provided a summary digest of the items most likely to impact MCAA members and the MCAA policy agenda. The President is seeking greater individual stimulus checks, so there may be an amendment or veto, but this summary will stand for most of what will be the final result. Correction: The latest COVID relief measure signed into law Sunday does not extend the requirement that employers offer paid sick and family leave as required under the Families First Coronavirus Relief Act passed last March as erroneously reported in the MCAA summary published in the Weekly Update on December 28, 2020. The latest COVID bill extends only the availability of the refundable tax credit as under the FFCRA until the end of March 2021 for those employers voluntarily providing such paid leave after December 31, 2020. MCAA regrets the error.…
Join experts from Withum’s SBA Financial Services and Tax Services Teams as they navigate through the myriad of provisions included in the more than 5,000 page legislative package finalized early this week. Withum's webinar will be held on Wednesday, December 23rd from 1:00 PM - 2:30 PM EST.…

Did your student chapter have any graduates in 2020? Has your student chapter welcomed new members? Perhaps your student chapter has a new president or faculty advisor. Please email MCAA’s Director of Career Development, Megan Walsh, with your Student Chapter transitions.

As part of MCAA’s efforts to connect our contractor and manufacturer/supplier members, we have added a new Manufacturer/Supplier Training area on http://MCAA.org. Visit to connect with the latest training opportunities from our supplier partners.

http://ow.ly/DTEg50DcuAv

Don't miss Sponsor Spotlight #9 on Friday, January 22 at 2 p.m. ET with Tim Brink, MCAA CEO and Jeff Drees, Executive Vice President of Sales, Marketing & Aftermarket for Daikin Group. Register today at http://ow.ly/xl0v50CIcWr

Load More...