Updated news and information for Hiscpa.com

FTE Impact on Loan Forgiveness & Documentation for PPP Loan Forgiveness

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FTE Impact on Loan Forgiveness & Documentation for PPP Loan Forgiveness

It is my understanding you may choose to either use an 8 week or a 24 week reporting period. If you have used all of your PPP monies for forgivable expenses I suggest submitting your forgiveness request as soon as your 8 week reporting period is completed. However if you have not yet used substantially all of your PPP monies for covered expenses I would suggest considering a 24 week reporting period while keeping in mind the impacts of FTE’s (Full Time Equivalents) through 12/31/2020.

As long as your FTE levels do not fall or you can rehire employees by 12-31-2020 we should not have our forgiveness levels decreased. Please be reminded employees fired for cause and employees to whom we make a bonafide offer who opt not to return to work do not count against you for FTE calculation purposes.

If you have reductions in FTE levels during the covered period, you can consider rehiring employees by December 31, 2020, to help maximize loan forgiveness. If any reduction of FTE’s occurred from February 15 and you fully restore the FTE level by December 31, 2020 to equal or higher than FTE’s as of February 15, 2020, your loan forgiveness will not be reduced by any FTE reduction during the covered period. Please be reminded the FTE reduction and salary reductions impact both the 8 & the 24 week forgiveness amounts.

The CARES Act provided that, to apply for forgiveness, the borrower is required to submit the following documentation to the lender that is servicing the PPP loan.

Documentation verifying the number of FTEs on payroll and pay rates for the applicable pay periods, including payroll tax filings reported to the IRS (Form 941) and state income, payroll, and unemployment insurance filings.

Documentation, including cancelled checks, payment receipts, transcripts of accounts, or other documents verifying payments on covered business mortgage obligations/including copy of mortgage, covered lease obligations and rental agreements, covered utility payments and amounts the employer pays towards health insurance (net of any amounts paid by employees).

Thanks and be safe!

His CPA: Back Taxes, IRS Representation & Offer in Compromise

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His CPA: Back Taxes, IRS Representation & Offer in Compromise

AWARD Winning: EXCELLENCE IN SERVICE

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AWARD Winning: EXCELLENCE IN SERVICE

As CFO/CPA, maintained quality earnings during dramatic company growth period ranging from $3 to 30 million in five years

BBA in Accounting · 1979 from Georgia State University · Atlanta, Georgia
GPA: 3.8/4.0

To Learn More

Honors

Payroll Protection Program Law Changes

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PPP Law Changes

Below is a link to an article detailing the changes Congress passed/President signed easing the restrictions for PPP (Payroll Protection Program).

The predominant clauses are:

Extending the reporting period from 8 to 24 months for those who received a PPP loan prior to June 5th (you may select which period is best for your company). For loans made after June 5th the reporting period is 24 months.

The requirement that payroll costs have to be as a percentage of the forgivable portion of the loan has been reduced from75% to 60%.

For more details:

https://www.forbes.com/sites/alangassman/2020/06/14/new-ppp-law-changes-since-june-5—the-wild-ride-continues/#282d39ae46fb

The Employee Retention Tax Credit Helps Keep Workers Working for Employers Who Did Not Receive PPP Monies

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The Employee Retention Tax Credit Helps Keep Workers Working

Employers can received a credit against their payroll taxes of up to $5,000 per paid employee offsetting the employer’s 6.2% share of Social Security taxes. Those who received a loan under the PPP Program are not eligible for this additional credit.

The credit is calculated as 50% of all qualified wages (including healthcare premiums paid in a given calendar quarter. Maximum qualified wages for all qualified wages is $10K resulting in a maximum credit for any employee $5,000.

https://www.kiplinger.com/article/taxes/T054-C005-S011-employee-retention-tax-credit.html

Trump signs PPP reform bill loosening restrictions on small business loan recipients

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Trump signs PPP reform bill loosening restrictions on small business loan recipients

https://www.foxbusiness.com/politics/trump-ppp-reform-bill-restrictions-small-business-loan-recipients

Business NEWS on The PPP Program

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The U.S. House Passed Rules Governing the PPP Program Loan Monies and Debt Forgiveness. Two of the Major Changes Include Extending the Covered Period to 24 Weeks and the Requirement that Payroll Costs be 75% of the Amount Forgiven Being Reduced to 60%.

Hopefully the law will quickly be passed by the Senate and signed by the President.

https://www.forbes.com/sites/allbusiness/2020/05/31/houses-passes-ppp-loan-forgiveness-bill-treasury-issues-harsh-forgiveness-regulations/#5a69f4977dce

Attached is an early release of the Paycheck Protection Program Loan Forgiveness Application for your Review.

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Attached is an early release of the Paycheck Protection Program Loan Forgiveness Application for your Review.

Be sure you are tracking all of the information which will be needed to process your Forgiveness Application Request

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

His CPA Included in….A CPA’s Ultimate Guide to the Best Accounting Niches by Industry

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His CPA Included in….A CPA’s Ultimate Guide to the Best Accounting Niches by Industry

A CPA’s Ultimate Guide to the Best Accounting Niches by Industry

Tracking Loan Proceeds to Your Business for the Payroll Protection Program/Stimulus Monies

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Tracking Loan Proceeds to Your Business for the Payroll Protection Program/Stimulus Monies

I am suggesting to all who received a loan for the Payroll Protection Program/Stimulus Monies that Congress approved for small business owners for covered payroll expenses, rent & utilities to:

Set up a separate bank account and deposit the full amount of the loan so that all of the loan proceeds are in one account.

Pay all/only covered expenses directly out of new established bank account so that there is a clear audit trail of what has been paid out of this account.

If for any reason it is not possible to pay all covered expenses out of the newly established loan account then as soon as monies are paid for covered expenses reimburse the account where monies were paid from.

Keep a file of all covered expenses, bank statements, canceled checks and supporting documentation in one place.

This will help ensure all of your covered expenses to be tracked are in one account and for all of the covered expense documentation to be readily available when/if requested at the end of the eight week reporting period.

Blessing and be safe.

www.HisCPA.com