Congress just passed legislation that creates funding for additional Paycheck Protection Program (PPP) loans for small businesses. If small businesses have any questions regarding … August 29, 2020 | Kristine A. Tidgren. Created with Sketch. Example. Paycheck Protection Program (PPP) Frequently Asked Questions (FAQs) on Loan Forgiveness Your lender MUST make a decision on your application for forgiveness within 60 days. Revenue Ruling 2020-27 provides guidance on PPP participants who have applied for forgiveness for their loans and have not received an indicator of the amount being forgiven.  The ruling, to summarize, states that if the taxpayer has a reasonable expectation for forgiveness, they cannot deduct the expenses in 2020 that the loan forgiveness covers. Inc. describes the Need for the Federal Reserve to step up and help the Main Street Lending Program in THIS ARTICLE published August 28, 2020. He is skilled in identifying and integrating the full range of financial and non-financial business issues in contract negotiations and resolution of business decisions. Our experts stand ready to help you with your loan as well as your unique finance and accounting needs – Experts@FahrenheitAdvisors.com. This means that you can calculate your best option after the fact. Here are answers to six questions which will address both strategies and the rumors: At this point there is NOT a second PPP program in place. Even if you received your PPP loan before the PPP Flex Act was released on June 5, 2020, you still have 10 months after your covered period ends to apply for loan forgiveness. PPP Loan Forgiveness Calculation Form. Monday: 8:30 am – 5:00 pm Tuesday: 8:30 am – 5:00 pm Wednesday: 8:30 am – 5:00 pm Thursday: 8:30 am – 5:00 pm Friday: 8:30 am – 5:00 pm Saturday: Closed Sunday: Closed, MMNT Certified Public Accountants 160 Chapel Road Suite 301 Manchester, CT 06042 Email: help@mmnt-cpa.com Phone: 860.643.1001 Fax: 860.533.0405, Formerly known as Montovani, Murray, Nemphos and Tierinni, LLC, Matthew J. Tierinni, CPA Karl J. Badey, CPA, MST Philip S. Nemphos, CPA, CVA, Audits – Reviews – Compilations – Agreed-upon Procedures, 2021 Annual Report Instruction Form for Connecticut LLCs, Click here for the MMNT Employment Application. When completing SBA Form 3508 for loan forgiveness, include the eligible non-cash compensation payments described above on lines 6, 7, and 8 of PPP Schedule A. As a result, there was not a lot new to talk about. As of November 17, 2020, the IRS released a new Ruling and a new Procedure in regards to Paycheck Protection Program (PPP) loans. Last updated: October 28, 2020 - Simpler PPP forgiveness application for loans up to $50,000 available starting mid-November. PPP Loan Forgiveness Calculation Form Coronavirus (COVID-19): Relief options and Additional Resources. NEW GUIDANCE AND FORGIVENESS APPLICATION ANSWERS MOST OF THE OPEN QUESTIONS. Automatic PPP loan forgiveness has been floated a couple of times. It will also make it easier for many current PPP borrowers – especially with loans of $150,000 or less – to request Forgiveness. This amount will reduce your expenses and can quite possibly increase your taxable income. This Procedure states that those denied will have the option to take those expenses in 2021 or have the option of amending their 2020 return to include them. The Paycheck Protection Program Flexibility Act includes changes that should bring a sigh of relief for business owners who continue to struggle to … New applications were not accepted after August 8, 2020, most earlier loan recipients completed their 8-week covered period over the summer, and the pace of revisions to the program finally slowed down. Most recently, it came up in the updated version of the HEROES Act passed in the House last week. NEW PPP LOAN FORGIVENESS RULES UPDATE. Revenue Procedure 2020-51 provides a safe harbor procedure for PPP loan participants whose loan is partially or fully denied (or those forgoing forgiveness). To receive this “gift,” however, … Loan Forgiveness Updates. 6 New PPP Loan Forgiveness Updates. Fears of a late-October PPP surprise came to the SBA’s attention because the program’s loan forgiveness application forms (3508, 3508EZ, and 3508S) display an expiration date of “10/31/2020” in the upper-right corner. If you need 24 weeks to use all loan proceeds on qualified expenses AND you do not plan to cut FTE’s, use the 24-week period. The IRS has ruled that any forgiven part of a PPP loan is exempt from being taxed as a “discharged debt.” PPP Loan Forgiveness Forms There are 3 choices in forms for forgiveness with distinct qualifications to be able to use the different forms. Right from the start, the Paycheck Protection Program (PPP) has been full of surprises. Now borrowers are focused on strategies to maximize loan forgiveness while also trying to sort out some common PPP rumors. Frequently asked questions What’s the biggest loan I can get? Therefore, borrowers may defer payroll taxes for the period from March 27, 2020 through December 31, 2020. He is a member of Fahrenheit’s Leadership Team. This also applies to those that haven’t applied for forgiveness at all yet. In addition to improving his clients’ accounting and finance operations, Doug frequently serves as the link between company owners and outside advisors including attorneys, CPAs, investment bankers, appraisers, and personal financial advisors. American Banker tells us Why banks are putting PPP forgiveness on the back burner in THIS ARTICLE published August 10,2020. For all other cases, it requires a sensitivity analysis of how much was spent when and what will your FTE headcount look like from 8-24 weeks. Here we go again! Any company that falls under this category will also be “exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or … President Trump has officially signed a bill passed by the House and the Senate that loosens the requirements for PPP Loan forgiveness. If they do come to agreement, expect that you will need to show a reduction in sales or profits to be eligible. The Small Business Administration and Treasury Department announced in October 2020 that it would greatly simplify the forgiveness process for any business that received a PPP loan worth less than $50,000. by Bill Berry on May 21, 2020. Published June 19, 2020. For sole proprietors or independent contractors with no employees, the maximum possible PPP loan is therefore $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation replacement. Update on the PPP loan forgiveness application . HEADS UP: The payroll services are working hard to generate reports to support your PPP Forgiveness Application, but their quality is still very inconsistent. This information is current as of November 18th, 2020. In general: The GOOD news is that you have 10 months from the end of your covered period to apply for forgiveness. Update, November 18, 2020: We have been closely monitoring legislative action and SBA guidance. Here are the key takeaways from recent CARES Act PPP provision updates: You have 24 weeks (rather than 8) to spend PPP funds on labor, interest, rents and utilities. The CARES Act requires that you APPLY TO YOUR LENDER FOR LOAN FORGIVENESS at the end of the eight-week period following receipt of your loan. The banking community is also cautious about opening their portals only to have the government change the rules once again. Help is only a phone call away. An Update on PPP Forgiveness. Why banks are putting PPP forgiveness on the back burner, Proactive Risk Management Planning Guidelines, 5 Steps to Create a Solid Total Reward Mix, Fahrenheit Advisors Taps Executive to Lead Richmond, VA Human Capital Management Practice, “an inability to return to the same level of business activity as the borrower was operating at before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.”. This procedure also states that you can deduct the expenses in 2020 if you forgo forgiveness of the loan. Apparently, based on the parameters laid out by the Treasury Department, Main Street Loans will be appropriate for a very small slice of the borrowing community. April 21, 2020. What this means is that if you have a PPP loan which the covered period ends before the your Year End, you will need to calculate your forgiveness amount, even if you don’t apply for it by that Year End. Doug Jones, Managing Director, provides fractional CFO and senior financial management services to small and midsize organizations. It has been awhile since we updated our clients and friends about the Payroll Protection Program (PPP). As a result, there is not a lot of focus on the program by bankers. Some errors come from incomplete data being input by users and other appear to be programming errors. Yesterday evening, the Small Business Administration (SBA) dropped another one: it … Update Regarding PPP Loan Forgiveness. Several reasons…the main one being their hope that some sort of automatic forgiveness as mentioned above will pass, thus reducing their workload. Not exactly. Menu. A loan review may occur which would require additional information, but we expect reviews to be rare due to the number of PPP loans. Safeguards The Good, the Bad and the Ugly of PPP Loan Forgiveness Delays Some banks aren't even ready to process PPP loan forgiveness applications--nearly … Check the reports carefully! New applications were not accepted after August 8, 2020, most earlier loan recipients completed their 8-week covered period over the summer, and the pace of revisions to the program finally slowed down. The legislation said that for loans under $50,000, recipients would not have to “submit any documentation or application to receive forgiveness” as long as they certified that they used the funds in compliance with the rules. Posted on August 28, 2020. CLICK HERE. 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