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COVID-19

AICPA PPP FORGIVENESS CALCULATOR

AICPA_ppp-forgiveness-calculator_1.xlsx

https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf

 

TREASURY DEPARTMENT LINK

This will give you information regarding PPP loans. Also, please consult your lender's website and/or your loan officer for their specific requirements.

https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses

 https://www.healthcare.gov/shop-calculators-fte/

May 1, 2020 - "Expenses Paid Using PPP Loan Monies Are NOT Deductible"

The IRS recently released the attached announcement confirming what we thought could eventually be decided.  Any expenses that are paid from PPP monies that are forgiven are not tax deductible.  In summary, the philosophy is that if one is not paying taxes on a source income then the expense related to that income is not deductible.  We anticipated this being a position that would be taken and clarified.  We will be sending a more detailed announcement and analysis for clients.

n-20-32.pdf

April 24, 2020

We hope you and your employees’ families are doing well in health, emotions and all other aspects during these challenges.

Many clients inquired about and/or applied for the PPP with their banks under the CARES Act, SBA and Treasury Department’s initial guidelines.  As of April 15th, the SBA issued additional “Interim Final Rules” with Q&A’s in the document. A complete copy of these recent rules should be read and can be found at the following link:

https://www.sba.gov/sites/default/files/2020-04/Interim-Final-Rule-Additional-Eligibility-Criteria-and-Requirements-for-Certain-Pledges-of-Loans.pdf

Much of this document addresses Self-employed individuals but has some other “clarifications” that will impact all small business owners including S-corporations/C corporations.  As we discussed in our conference calls and in our earlier updates to clients, they were still in a mode of “clarifying” what the terms of the CARES Act PPP would be.  Note- an important aspect is the forgiveness aspect of the PPP calculation and documentation in this recent release.  The calculation for forgiveness is updated on Page 11 in Q&A “f” of the document.  It states that “payroll costs” includes covered benefits for employees (but not owners).

The initial calculations that may have been made under the initial CARES Act data did NOT state this exception for owners.  Thus, if you have already applied and received the PPP funds, then note that when calculating the potential forgiveness after 8 weeks, the company paid group health insurance and retirement benefit for the benefit of any owners should NOT be included in the calculations submitted for forgiveness approval.  If you are considering the newest PPP funds and making an application, then you may NOT want to include that in your “payroll costs” calculation to determine the maximum PPP loan.

You will also see on Page 13 the Q&A item “g” discusses “What documentation will I be required to submit my lender with my request for loan forgiveness?”

We can assist you in assimilating any documentation and reports from your software to have organized and “reconciled” to submit at that time.

We want to again remind everyone that proper use of the funds is very important. Please do NOT think that “well it is a good to have these monies for 2 years at 1% interest rate even if not used properly” then beware.  In the Initial Final Rules issued on April 2nd and as suggested in one of press briefings, the Treasury Department has “teeth” to go after those who misuse the monies.  The following is in the issued rules:

“What happens if PPP loan funds are misused?”

If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts.  If you knowingly use the funds for unauthorized purposes, you will be subject to additional liability such as charges for fraud.  If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, SBA will have recourse against the shareholder, member, or partner for the unauthorized use.

We are here to assist you as needed.  We appreciate you and the relationship we have developed over the years and look forward to coming through the other side of this together.  Keep looking upward, outward and forward!

STIMULUS INFORMATION:


For those inquiring about the $1200 stimulus checks and process, the best resource we are aware of is the following IRS website which they state they will be updating as necessary:

https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

Employee Retention Credit

https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

 

https://www.irs.gov/newsroom/irs-employee-retention-credit-available-for-many-businesses-financially-impacted-by-covid-19

 

The IRS has established a page on their website to assist Taxpayers regarding the Economic Impact Payments.  See the following link and please be wary of any emails or phone calls asking for information as they are scams.  Only use the IRS official website.....

 https://www.irs.gov/coronavirus/economic-impact-payments

April 6, 2020

PPP_Loan_worksheet_Updated_040520_v3.xlsx

Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf

 

April 3, 2020

We have provided the link to the US Treasury site that they state will have updates to the loan process.  We recommend that you monitor the site regularly.

https://home.treasury.gov/system/files/136/PPP--IFRN%20FINAL.pdf

April 1, 2020

AICPA_Borrowers_Guide.pdf

CARES Act Update and Overview.docx

March 25, 2020

Georgia Tax filing update – now officially July 15th.

www.gscpa.org/content/Home/News/Professional-News/GEORGIA-INCOME-TAX-AND-TAG-RENEWAL-DEADLINES-EXTENDED.aspx

(This is link is provided by Georgia Society of CPA’s)

 

This is from the IRS website in the Q&As on tax relief  - The IRA contribution date is 7/15.

https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

IRAs

A17. Yes. Contributions can be made to your IRA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020. For more details on IRA contributions, see Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

HSAs

A21.  Yes. Contributions may be made to your HSA or Archer MSA, for a particular year, at any time during the year or by the due date for filing your return for that year. Because the due date for filing Federal income tax returns is now July 15, 2020, under this relief, you may make contributions to your HSA or Archer MSA for 2019 at any time up to July 15, 2020.  For more details on HSA or Archer MSA contributions, see Publication 969, Health Savings Accounts and other Tax-Favored Health Plans.

March 23, 2020 - Potential SBA Loan Source for Business Owners

NOTE - We are not promoting nor have we reviewed the various loan terms and lending sources but are sharing information as it becomes available so you can perform your own research to see what might best assist you through your specific circumstances and needs.

 

Updated 4:20 EST - SBA just held a conference call with its lending partners and provided additional detail on the SBA Economic Injury Disaster Loan Program and provided this additional detail on the parameters they have established for the business working capital loans now available relating to Corona Virus COVID-19. All businesses in the two states we serve (Georgia and South Carolina) are now eligible to apply online. These will be direct loans from SBA and will be repaid directly to SBA. The details on the loans and eligibility provided a little while ago:

 

  • Loan amounts will be up to $2.0 million for a business applicant and all its affiliates.
  • They will use credit scores in their decisions for approval.
  • Rates for businesses will be 3.75% fixed for 30 years.
  • All loans will have a repayment term of 30 years. Payments can be deferred for the first 12 months.
  • In a Phase I application (which will be most businesses) the maximum loan amount will be 50% of their gross profit from their last completed year. In other words off last years tax returns... Sales - Cost of Goods Sold = Gross Profit x 50% = Maximum Loan Amount.
  • Larger businesses can proceed to a Phase II application that will require additional documentation if they need more than $500,000.
  • Loans will be collateralized if over $25,000 if collateral is available with real estate being the preferred collateral.
  • All 20% or more owners will fully personally guaranty the loan. Changing ownership prior to application to lower an individuals ownership to avoid a personal guaranty could jeopardize eligibility.
  • Proceeds may be used for working capital for business expenses only including supplies and materials, payroll, debt payments, utility, and other operational costs. Essentially any expense that appeared in the business expenses in their financials in the past 12 months is likely eligible. Anything else such as expanding or renovating a facility or making capital equipment purchases (vehicles or other equipment) is not.
  • No debt consolidation will be allowed. The exception would be temporary or interim loans that were taken out since the crisis started for operational expenses may be refinanced. The business can pay regular monthly debt payments as they become due
  • Non-profits can apply but not churches, agriculture production, gambling, or sin businesses.
  • Timeline is expected to take less than a week for approval using the scoring system after a business applies directly online (they will use tax return transcripts as well to verify applications). Targeting 30 days to close.
  • They expect 300,000 to 500,000 applications depending on the length of the Corona Virus Crisis and encourage patience.
  • Businesses will be required to retain receipts and evidence of what they spent the proceeds on for a period of 3 years and may be subject to SBA Audit to insure only eligible business expenses were paid.
  • Everyone is encouraged to apply online at https://disasterloan.sba.gov/ela (Be aware with peak times the site may be difficult loading. If this happens check back at off peak times).

 

For additional information please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov.
 

 

March 20, 2020 – The Treasury Secretary has announced Federal returns do not have to file extensions even until July 15th. 

Stay tuned for formal Treasury Department notice.  See March 18th notice information below.

 

March 18, 2020  - The Treasury Department released the following notice - https://www.irs.gov/pub/irs-drop/n-20-17.pdf

The following information was included therein – “No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return. As a result of the postponement of the due date for making Federal income tax payments up to the Applicable Postponed Payment Amount from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by this notice.

Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020. In addition, interest, penalties and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by an Affected Taxpayer on April 15, 2020.

Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this section III may seek reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable. Similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations under section 6655.”

March 18, 2020 - News Release from Georgia Department of Labor:

The Georgia Department of Labor (GDOL) has adopted an emergency Rule 300-2-4-0.5 Partial Claims, effective March 16, 2020. The rule mandates all Georgia employers to file partial claims online on behalf of their employees for any week during which an employee (full-time/part-time) works less than full-time due to a partial or total company shutdown caused by the COVID-19 public health emergency. Any employer found to be in violation of this rule will be required to reimburse GDOL for the full amount of unemployment insurance benefits paid to the employee. Download the How Employers File Partial Claims Desk-Aid found on the GDOL Alert Page and follow the step-by-step instructions.

Filing partial claims results in your employees receiving unemployment insurance (UI) benefit payments faster, usually within 48 hours for claims filed electronically. Employees for whom you file a partial claim are NOT required to report to a Georgia Department of Labor career center, register for employment services, or look for other work.

Please continue to monitor our website at gdol.ga.gov for any updates to these guidelines.

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