Pandemic Economic Decision Making
In March, I wrote an article posted on the MWB blog and in our previous newsletter, titled “Business Response in Times of Crisis.” COVID had just recently been officially labeled a ‘global pandemic’ and we were all learning phrases and acronyms such as ‘flatten the curve’ and PPE” (personal protective equipment) – not to be confused with PPP (Paycheck Protection Program) which wouldn’t enter lexicon for another two whole months. The article’s main focus was planning for and dealing with [...]
UPDATE on Employee payroll tax deferrals
President Trump issued an executive order on August 8, 2020 providing that employers could defer (but not forgive) the employee’s portion of Social Security taxes for certain employees for wages paid between September 1, 2020 and December 31, 2020. The Social Security tax is the 6.2% portion of the employment taxes taken out of employees’ paychecks. Also, President Trump tasked the Treasury Department with providing guidance to implement the order and also to explore ways to eliminate the obligation to [...]
Should Employers wait for Treasury guidance before making employee payroll tax deferrals?
President Trump issued an executive order on August 8, 2020 providing that employers could defer (but not forgive) the employee’s portion of Social Security taxes for certain employees for wages paid between September 1, 2020 and December 31, 2020. The Social Security tax is the 6.2% portion of the employment taxes taken out of employees’ paychecks. Also, President Trump tasked the Treasury Department with providing guidance to implement the order and also to explore ways to eliminate the obligation to [...]
SBA issues 23 FAQs on PPP Loan Forgiveness
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 [...]
PPP Loan Application Deadline Extended Until August 8, 2020
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 [...]
SBA issues REVISED PPP Loan Forgiveness Application
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 [...]
Expect Changes & Flexibility to the Paycheck Protection Program
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 [...]
Accounting in the Time of COVID-19
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 [...]
Congress Likely to Extend Time Period for PPP Eligible Expenses
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 [...]
SBA issues PPP Loan Forgiveness Application
On May 15th the SBA issued the Paycheck Protection Program (PPP) Loan Forgiveness Application and instructions. This provides the forms borrowers need to apply for forgiveness of their PPP loans as well as the documentation lenders are required to collect from borrowers. Generally, a borrower can apply to have certain payroll and nonpayroll costs forgiven during the 8 week period following the receipt of the PPP loan. The PPP Loan Forgiveness Application and instructions include several measures to reduce the [...]
MWB recorded a sequel to the PPP webinar, available free on Missouri Bar Association
On May 11th, 2020, Julie Welch, Steve Browne, Cara Smith, and Preston Herman recorded a webinar titled “PPP Loan Forgiveness & Business Interruption Claims”, which is available for free to all members of the Missouri Bar Association via rebroadcast on May 26th, 2020 and immediately for self-study at the below link. The webinar is a sequel to MWB’s “CARES Act Cash & Business Interruption” webinar recorded on April 14th, 2020. Members of the Missouri Bar that viewed the first webinar [...]
Safe harbor date to repay PPP loans extended
The May 14th safe harbor deadline (extended from the original date of May 7th) to repay Paycheck Protection Program (PPP) loans was extended until May 18th (SBA FAQ #47 issued 5/13/20). This extension is to give borrowers an opportunity to review and consider FAQ #46. See our blog post Good Faith Certification for PPP Loans. Click the link below to see a PDF of all FAQs issued by the SBA on the PPP loans. https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2013%2020_2.pdf Reach out to [...]