PPP loans

On March 13, 2020, the President declared the Coronavirus pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, tribes, territories, and the District of Columbia.  This declaration allows taxpayers to invoke Section 165(i) of the Tax Code turning 2020 losses into 2019 deductions. Small business owners may elect to deduct 2020 expenses directly attributable to COVID-19 on their 2019 returns, or amend 2019 if already filed.  Qualifying losses must not be compensated by insurance or otherwise.  Examples include costs for: additional office cleaning expenses personal protection equipment (PPE) costs to move employees to shelter at home [...]

On June 5th, President Trump signed into law the PPP Flexibility Act (PPPFA) of 2020. Here are the highlights of the Act: Extension to 24 weeks to spend loan proceeds instead of the original 8 weeks Reduction of the required payroll spending from 75% to 60%. You may now use up to 40% for rent and utilities Lengthen the time to repay the “non-forgivable” portion of the PPP proceeds to 60 months at a 1% APR vs. the original 24 months Extend deferral of Social Security taxes until the end of 2020 even if PPP loan is forgiven Extend the period [...]

PPP Loan Forgiveness Butcher, Baker, Candlestick Maker Businesses that received PPP loans will have to comply with SBA guidelines and then IRS regulations to receive forgiveness and henceforward prepare books for 2020 taxes. Once the PPP funds are received, an 8-week time clock begins. Actions to properly account for that money need to be put into place A separate account is advised, but can be worked around if specific bookkeeping practices are instituted To receive full forgiveness, at least 75% of the loan must be used on payroll Employer FICA matches will not be considered, nor will payroll processing fees Owners [...]

April 3rd, 2020 is the first day business owners in the United States can begin applying for the PPP (Payroll Protection Program) loan that is part of the Assistance for Small Businesses through the CARES Act. The secure hyperlink below will take you directly to the U.S. Treasury Department website for everything you need to know about the PPP Loan program including the online application. https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses. Hopefully you took action this week to contact your business banker to make them aware you will be applying for the PPP Loan. You will have to apply through your bank, which is likely an [...]