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Tag: Loan Forgiveness

Unintended Effect of PPP Loan Forgiveness: Reduction in R&D Credit

By Travis Miskowitz, Manager, CFO Advisory The Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides loans to small and mid-size businesses to cover payroll and other specific costs during the coronavirus pandemic. PPP loans may be forgiven under particular circumstances, and are typically excluded from taxable income. Sounds simple—and if you focus on the question of payroll costs, it is. But companies that are interested...

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SBA Releases Long-Awaited Loan Forgiveness FAQs

By Travis Miskowitz At long last, the Small Business Administration (SBA) and the Department of the Treasury have released guidance addressing Paycheck Protection Program (PPP) loan forgiveness. This guidance can be relied upon as the SBA’s interpretation of Section 1106 of the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), as amended by the Paycheck Protection Program Flexibility Act (Flexibility Act). Consistent with previous updates, the SBA has decided to provide...

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Latest PPP Loan Forgiveness Guidance Released: Fails to Address Two Key Requirements

On Friday May 22nd, the Small Business Administration (SBA) and the Treasury Department issued two new Interim Final Rules (IFR): one covering Loan Forgiveness and the other covering Loan Review Procedures.  The loan forgiveness guidance, which builds upon the loan forgiveness application and instructions that were released May 15th, still does not make changes to provisions for the 75/25 requirement to spend PPP funds on payroll and non-payroll costs, or the 8-week (56-day) covered...

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SBA Releases Paycheck Protection Program Loan Forgiveness Application

By Travis Miskowitz On Friday May 15th, the Small Business Administration released the long-awaited Paycheck Protection Program (“PPP”) loan forgiveness application.  The forgiveness application includes detailed instructions for borrowers to calculate their eligible costs and determine the amount of PPP loan forgiveness. The form provides more guidance than previously available, but still not as clear as we’d hoped.  There are still unanswered questions and we anticipate additional...

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Expenses Relating to PPP Forgiveness are Nondeductible

By Evan Gernant On Thursday, April 30, the IRS issued Notice 2020-32 clarifying that to the extent a Paycheck Protection Program (PPP) loan is forgiven, the associated expenses will be nondeductible for federal tax purposes.  The CARES Act made it clear that any amount of forgiveness of a PPP loan would be non-taxable.  What was not addressed and left for interpretation was whether the associated expenses would be tax-deductible.  Many were hopeful for a better ruling from the IRS...

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The Path to PPP Loan Forgiveness: Start Preparing Right Away

Update: On Friday, May 15th, the SBA released the application for Paycheck Protection Program Loan forgiveness. Please see this article, which highlights key elements and guidance to the application process. By Travis Miskowitz Paycheck Protection Program (PPP) loans are designed to be forgiven, but it doesn’t happen automatically. It’s best to get a plan in place to work toward maximum forgiveness as soon as you receive your PPP loan. The SBA is expected to issue additional guidance...

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