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As with much of what has been issued regarding PPP loans and ever-changing guidance, the following analysis of deductibility is subject to legislative change.  At the end of April, the IRS issued guidance precluding deductions for expenses paid with PPP funds.  The Small Business Expense Protection Act would reverse that and allow the expenses to be deducted, however, while still under consideration, this bill has not yet passed Congress.   A frequent question by borrowers is how to project 2020 [...]

In anticipation of PPP borrowers beginning to file applications for PPP loan forgiveness, the SBA issued 23 new FAQs. While they do not cover all needed guidance, answers were provided in the following categories: General Payroll costs Nonpayroll costs Wage and headcount reductions Meanwhile, legislation has been introduced to expand and extend the PPP loans. Some key provisions still under debate would: extend the PPP application deadline for small businesses from August 8 to December 31; allow some small businesses [...]

Congress extended the Paycheck Protection Program (PPP) loan application deadline from June 30, 2020 until August 8, 2020.  PPP loans are potentially forgivable loans designed to provide businesses with funds primarily to cover payroll costs during the 24 weeks following the loan (originally 8 weeks, but the program has been revised numerous times since its inception in March).  Based on data from the SBA, as of June 30 there was over $130 billion left of unused funds for the PPP [...]

On June 16th, the SBA issued the REVISED Paycheck Protection Program (PPP) Loan Forgiveness Application and a new EZ Forgiveness Application.  Generally, a borrower can apply to have PPP Loan amounts forgiven related to certain payroll and non-payroll costs paid during the “covered” period (generally either 24 weeks, or, if the loan was made before June 5, 2020, an 8-week period can be elected). The borrower must make certain certifications, some of which are: The funds were used for eligible [...]

Wednesday evening, June 3rd, the Senate passed the House’s version of Paycheck Protection Program Flexibility Act of 2020 and now awaits President Trump’s signature.   The bill passed unanimously Wednesday evening in the Senate and 471-1 last week in the House.  Designed to make it easier for borrowers to get full, or almost full, forgiveness, the bill allows for flexibility in time and how dollars can be spent and still qualify for forgiveness.  Key provisions are: Option to extend the 8-week [...]

Amidst the chaos created by the COVID-19 pandemic, much of corporate America has been concentrating on how to obtain Paycheck Protection Program (PPP) funds, and then making sure they are adhering to the ever-changing rules on forgiveness. For these companies, a key question is now – how do we account for these funds?   Accounting for PPP Generally, the funds received through the PPP program are considered loans and should be accounted for as liabilities. No “below-market” interest should be [...]

On May 28, 2020, the House of Representatives passed the Paycheck Protection Program Flexibility Act, nearly unanimously (417-1). Most importantly this bill would extend the forgiveness period for PPP funds from 8 weeks to 24 weeks. Though the final time period is unknown, it appears very likely that the Senate will take up legislation that will agree with extending the time period for forgiveness. Indications from the AICPA support the belief that some extension will be given legislatively.   Though [...]