Background of Paycheck Protection Program
Discover the background of the paycheck protection program and how it connects to federal taxes.
First PPP Loan Draw
The CARES Act authorized SBA-backed loans for the Paycheck Protection Program (PPP). These loans can be forgiven if certain conditions are met. The program was originally scheduled to expire after June 30, 2020. However, due
to the continuing struggle of businesses during the COVID-19 pandemic, the program was extended.
Second PPP Loan Draw
Congress authorized a second PPP loan draw but generally limited the applicability to small businesses with 300 employees or fewer that suffered a 25% or more reduction in gross revenue during any quarter in 2020.
The first PPP draw was originally scheduled to expire after June 30, 2020. However, The Paycheck Protection Program Flexibility Act (PPPFA) extended the application period through August 8, 2020, and the Consolidated Appropriations Act, 2021 (CAA), signed into law by President Trump on Dec. 27, 2020, included new funding for the PPP, which had expired Aug. 8, 2020, and extended the application period until March 31, 2021.
The PPP Extension Act of 2021 (H.R. 1779) that President Biden signed into law on March 30, 2021, extended the application deadline for both first and second draw PPP loans from March 31, 2021, to May 31, 2021, and provided for an additional 30 days for processing applications beyond that deadline.