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Tag: Paycheck Protection Program

Straight Outta Congress: How to Maximize the Employee Retention Credit (ERC) & Paycheck Protection Program (PPP)

By Travis Miskowitz, Manager, CFO Advisory This is a developing story; updates will be published as additional information becomes available. The Consolidated Appropriations Act of 2021 introduced major changes to the Employee Retention Credit and the Paycheck Protection Program. This article provides a comprehensive overview of the Employee Retention Credit, and we cover the PPP updates in this article. Our focus and concern with this update is centered on the strategy and steps...

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Show me the money…again! Congress agrees to $900B Emergency Coronavirus Relief Act of 2020

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager, and Travis Miskowitz, Manager, CFO Advisory Congressional leaders are close to finalizing the next round of stimulus, referred to as the Emergency Coronavirus Relief Act of 2020 providing for $900 billion in government funds aimed at supporting small businesses and the ailing economy. The coronavirus relief bill is expected to pass with bi-partisan support, and the President is expected to sign the bill into law quickly. The relief...

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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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Treasury and IRS Issue Guidance on Deductibility of Expenses Related to a PPP Loan

By Michael Bodrato, Director of Taxes The US Treasury and the Internal Revenue Service (“IRS”) released guidance on November 18, 2020, in Rev. Rul. 2020-27 and Rev. Proc. 2020-51, clarifying the tax treatment of expenses where a loan received under the Paycheck Protection Program (“PPP”) has not been forgiven by the end of the year in which the loan was received. The IRS clarified in a notice issued on May 18, 2020, that since under the CARES Act businesses are not taxed on the proceeds...

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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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PPP Flexibility Act Passes Senate, significantly decreases barrier to loan forgiveness

By Travis Miskowitz The Senate unanimously approved H.R. 7010 – Paycheck Protection Program Flexibility Act of 2020. By passing the House bill, the Senate avoids a long and drawn out reconciliation process. The President is expected to sign the bill into law quickly. While the bill provides much needed flexibility to small businesses, there is one change that can significantly impact a borrower’s ability to achieve loan forgiveness. The tersely worded bill provides for only 7 bullet...

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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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PPP Loan Forgiveness Application – Overview of Required Documentation

By Tricia Meola On May 15th, the Small Business Administration released the highly anticipated Paycheck Protection Program Loan Forgiveness Application. The application is lengthy, the calculations are complex, and the instructions aren’t the most straight-forward. At first (and second) glance, the application process is quite overwhelming!  In order to assist you, we are going to break down the components beginning here with the four main areas of required documentation. Please...

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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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SBA Clarifies Safe Harbor Status for Loans Under $2 Million

By Travis Miskowitz  On 5/13/2020, the SBA issued FAQ 46 which grants Safe Harbor status to all loans under $2MM. Small businesses received a welcome update today via SBA FAQ 46 which states that businesses, including their affiliates, that accepted Paycheck Protection Program loans of $2 million or less, will be assumed to have performed the required certification in good faith. The PPP application requires small business owners to certify in good faith that “current economic uncertainty...

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Are You Applying For the PPP in Good Faith? How to Document Your PPP Loan Application Decision

By Travis Miskowitz One important aspect of applying for a PPP loan is certifying in good faith that your loan request is necessary. The PPP application asks you whether “current economic uncertainty makes your loan request necessary to support your ongoing operations.” We have put together this list of considerations to help you assess in good faith and officially justify your need for this emergency funding. Read this today to ensure your business has made an informed decision...

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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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Documenting Expenses to Support PPP Loan Forgiveness

By Travis Miskowitz The Paycheck Protection Program allows loans of up to $10 million at 1% interest to employers with fewer than 500 workers. The purpose of the program is for employers to retain their employees; the loan amount is intended to cover two months of payroll and overhead. The government will forgive most or all of the loan if the company keeps its workers and does not cut wages. The maximum amount of the PPP loan that is eligible for forgiveness is equal to the amount...

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SBA Preps Banks for Mobilizing Around PPP Applications, Provides Further Clarity Regarding Parameters

By Travis Miskowitz Following President Trump’s signing of the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin yesterday announced that the SBA and Treasury Department have initiated a robust mobilization effort of banks and other lending institutions to provide small businesses with the capital they need. The CARES Act establishes a new $349 billion Paycheck Protection Program. The Program...

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The Economic Injury Disaster Loan vs. The Paycheck Protection Program

By Travis Miskowitz On March 27th, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus bill that includes a loan program to keep small businesses afloat during mandated COVID-19-related closures.  The CARES Act includes a Paycheck Protection Program (PPP) which authorizes up to $349 billion of federally guaranteed loans to qualifying small businesses. This new loan program is based on the architecture of the SBA’s existing...

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Paycheck Protection Enacted For Small Businesses

By Travis Miskowitz [Updated 4/3/2020] Congress passed “The Coronavirus Aid, Relief, and Economic Security Act” (CARES Act), which included the “Paycheck Protection Program” (PPP) for small businesses. PPP applications can be obtained from participating SBA lenders beginning today. Many banks have reported that they may be requiring submissions to come from current banking clients while others have been struggling to get all the necessary steps in place. While each bank is creating...

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