Let Us Help: Paycheck Protection Program
If you’re like many business owners in the US today, you’re trying to get the most information possible about how to keep your business running. The CARES Act created new relief loans for small businesses called Paycheck Protection Program (PPP) loans. They are intended to encourage employers to keep their employees on their payroll, so there are huge benefits to these loans.
If you spend the loan money on eligible expenses, up to 100% of your loan can be completely forgiven with no income tax implications. In order to qualify for this loan forgiveness, you have to provide documentation and meet all the borrower requirements.
Things that are considered eligible expenses are:
- Payroll expenses
- Employees’ commissions, salaries, or comparable compensations
- Healthcare (including premiums) and retirement benefits
- Paid medical, sick, or family leave if no tax credits were taken under FFCRA
Mortgage interest payments in place as of February 15, 2020 (excluding prepayment fees or mortgage principal payments)
- Rent in place as of February 15, 2020
Ineligible expenses are things like:
- Accounts payable (including payments to independent contractors and proprietorships)
- Principal payments on debts (including mortgage)
- Life insurance
- Interest payments on debts incurred after February 15, 2020
- Costs that aren’t included in the first list
How We Can Help
We can help ease the complication of this process. We can help your business work out the implications of rehiring previously terminated employees and reduced employee salaries on loan forgiveness, determining the best bank account to use for your PPP proceeds, and creating an eight-week budget for your proceeds. We can also help you with tax planning and strategy in regard to the CARES Act, field exams to make sure you’re meeting PPP loan forgiveness requirements, and qualifying for partial PPP forgiveness if you don’t meet the requirements for 100% forgiveness.
The best recommendation is to have us alongside you from the onset, but if you have already been approved for a PPP loan, we’ll assist you in putting a structure in place to accurately account for the use of funds before you get the proceeds and to receive the most forgiveness available. It’s absolutely vital that you have guidance documenting funds in order to maximize accuracy and ensuring documentation is timely for loan forgiveness, and we can do this for you.
Please contact us if you have any questions.