The Consolidated Appropriations Act, 2021 (CAA) has expanded which expenses are eligible for Paycheck Protection Program (PPP) loan forgiveness. During this two-minute video, Chugh, CPAs, LLP Partner and CPA Edith Miranda-Smith shares the latest on which non-payroll costs are eligible for loan forgiveness.
To qualify for complete loan forgiveness, borrowers must spend at least 60% of their loan proceeds on eligible payroll expenses during their loan’s covered period. They can spend the remaining 40% on eligible non-payroll expenses.
The CAA expanded the list of eligible non-payroll expenses to include:
- Certain operating costs, such as accounting, human resources, product or service delivery, sales and billing, cloud computing services, and more.
- Supplier costs required for current operations.
- Personal Protective Equipment.
- Certain property damage cost caused by vandalism and looting in 2020 that are not covered by insurance.
- Mortgage interest, rent, and utilities due on agreements signed before February 15, 2020.
These rules apply to first draw and second draw PPP loans that have not already been forgiven.
For help applying for a second-round PPP loan or getting your PPP loan forgiven, please contact your trusted Chugh CPAs, LLP professional.