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re: PPP Loan Forgiveness App is finally out
Posted on 5/18/20 at 1:21 pm to NOSHAU
Posted on 5/18/20 at 1:21 pm to NOSHAU
Saw this in CityBusiness today-
Crazy that the whole program may change after the fact. What guidelines will they use to hold companies accountable for as a result of the change?
quote:
Report: Paycheck Protection Program changes on the way
By: CityBusiness staff reports May 18, 2020 0
Lawmakers and government officials are preparing to make key changes to the Paycheck Protection Program that could give small businesses more flexibility, The Wall Street Journal reports.
The PPP as it is currently written stipulates that a business use 75% of its loan on employee salaries in order to qualify for forgiveness. Business groups have asked for more flexibility.
The program may also be tweaked to give businesses more time to spend their funds. Some businesses have had trouble spending the money in the current two-month time frame due to delays in getting the funding and also rehiring employees. The PPP mandates that businesses keep a full staff in order to qualify for forgiveness, but some have remained closed due to stay-home orders.
The publication reported Sunday that the program could shift its focus from helping keep employees on payrolls to helping keep small businesses from failing.
LINK
Crazy that the whole program may change after the fact. What guidelines will they use to hold companies accountable for as a result of the change?
This post was edited on 5/18/20 at 1:22 pm
0
Posted on 5/18/20 at 1:51 pm to TigerDeBaiter
quote:
Any CPAs want to make an interpretation as to if this includes wages only or wages plus draws? As an example, s-Corp llc, where owner takes wages but also takes schedules draws.
S Corp draws weren't included in the amount of loan proceeds, so they won't be included in amount eligible for forgiveness.
Posted on 5/18/20 at 1:55 pm to NaturalBeam
quote:
$15,385/20,833 = 73.85%. It sounds like the rule requires that 75% be used for payroll - but since I'm prohibited from paying myself 75% of the loan, might I have to pay back the whole thing?
I have anticipated guidance that bridges the gap between the 73.85% and the 75%, as this is a well-known issue. No guidance yet, but just like the release of the loan application app has been followed up with 9 interim final rules and 40-something FAQs, I'm expecting we will start to see the same thing with the loan forgiveness part of this, now that the app is out.
In no event would you have to pay the whole thing back.
If you spend 75% on payroll costs and the 25% remaining on the other eligible stuff, you will get full forgivness.
If you spend 73.8% on payroll costs and 26.2% on the other eligible stuff, and they won't give us any "good enough" clearance, then you get something a bit less than 100 percent forgiven. There's a math calc for that.
Posted on 5/18/20 at 1:59 pm to LSUFanHouston
As I interpret the rules for the utility expenses, we can expense stuff from February thru June? So 5 months? is that correct?
Posted on 5/18/20 at 2:06 pm to iron banks
quote:
Got funded May 1. Paid my May 1st rent on April 29th. Do I get to include that or just June and early pay July for two months worth of rent.
At this point, I would say the May 1 rent is left out, but I would not be surprised if they fix this in guidance, since it seems like it's BS that you would get punished for paying a bill before it is due.
June 1st rent will count since it was incurred (and likely paid during your covered period.
July 1st rent will count as long as you pay it by the end of your 56 days.
Posted on 5/18/20 at 2:11 pm to Chad504boy
quote:
As I interpret the rules for the utility expenses, we can expense stuff from February thru June? So 5 months? is that correct?
Start with your date of receipt of proceeds, i.e. the start of your covered period.
Any utility bills you pay during this covered period counts, even if the service was provided before the period started. Further any bills that cover costs incurred during the period, but are paid after the end of the period, are included, as long as you pay it by the first due date after the period.
Example, your period ends June 24th. Your electric bill which is issued on July 2nd is due on July 21st, includes service in arrears for the electric period ending June 30th. As long as you pay that bill by July 21st, the amount of utilites paid on that bill will count, as much as they relate to service incurred before June 24th.
I imagine we will get guidance about if the entire bill counts or if you have to pro-rate it.
Posted on 5/18/20 at 3:09 pm to LSUFanHouston
quote:
S Corp draws weren't included in the amount of loan proceeds, so they won't be included in amount eligible for forgiveness.
I think you may have misinterpreted the question, or I am not understanding the answer. But my question is not can I make a distribution and forgive that portion, but if an owner gave themself a raise in January in form of wages, will that difference in payroll not be be eligibles for forgiveness? In other words, can I only forgive owners payroll from last year’s value of 8 weeks of salaries?
Sorry for the run-on..
Trying to define compensation of an owner.
quote:
does not exceed eight weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.
Posted on 5/18/20 at 3:23 pm to TigerDeBaiter
quote:
I think you may have misinterpreted the question, or I am not understanding the answer. But my question is not can I make a distribution and forgive that portion, but if an owner gave themself a raise in January in form of wages, will that difference in payroll not be be eligibles for forgiveness? In other words, can I only forgive owners payroll from last year’s value of 8 weeks of salaries?
That will work for an employee, but not for an employee-owner. The amount you can use is the lower of $15,385, or the 8/52 of 2019 compensation. This is per the instructions for Line 9 of Sch A of the loan forgiveness application.
Posted on 5/18/20 at 3:39 pm to SLafourche07
Have a question about the Alternative Payroll Period. As a employer with a biweekly payroll, it appears we have 2 choices. Use the 8 week period from the 1st day of disbursement, or use the 8 week period on the first day of the 1st payroll period following disbursement.
I rec'd my funds in the beginning of a payroll cycle on 4/15. That payroll cycles ran from 4/12 - 4/25. The next payroll cycle was 4/26 - 5/09.
If I am reading this right, I get to choose which cycle I want between 4/12 - 6/06, or 4/26 - 6/20.
I rec'd my funds in the beginning of a payroll cycle on 4/15. That payroll cycles ran from 4/12 - 4/25. The next payroll cycle was 4/26 - 5/09.
If I am reading this right, I get to choose which cycle I want between 4/12 - 6/06, or 4/26 - 6/20.
Posted on 5/18/20 at 4:05 pm to Weekend Warrior79
quote:
I rec'd my funds in the beginning of a payroll cycle on 4/15. That payroll cycles ran from 4/12 - 4/25. The next payroll cycle was 4/26 - 5/09.
If I am reading this right, I get to choose which cycle I want between 4/12 - 6/06, or 4/26 - 6/20.
You can use one of the two following periods:
1) 4/26 - 6/20 this is your alternative period
2) 4/15 - 6/09 this is your "regular" period
Posted on 5/18/20 at 4:12 pm to LSUFanHouston
If you pay semi-monthly, is the assumption that you have to calculate at least one partial pay period? As you are only allowed to use the funds for 8 weeks, 4 semi-monthly pay periods will exceed 56 days (as it will be 61 days). If so, anyone know if it is sufficient to just take a prorata portion of a pay period or does it have to be exactly calculated by day?
This post was edited on 5/18/20 at 4:23 pm
Posted on 5/18/20 at 4:24 pm to Weekend Warrior79
We pay 2X a month. If we do our June 15th payroll on the 11th we will use the funds for 100% payroll.
Posted on 5/18/20 at 4:33 pm to NOSHAU
quote:
If you pay semi-monthly, is the assumption that you have to calculate at least one partial pay period? As you are only allowed to use the funds for 8 weeks, 4 semi-monthly pay periods will exceed 56 days (as it will be 61 days). If so, anyone know if it is sufficient to just take a prorata portion of a pay period or does it have to be exactly calculated by day?
You can count pay for days that are part of the period but not actually paid until after the period, as long as they are paid on the first regularly scheduled paycheck after the period ends.
I'm guessing it will be pro-rata, but this will have to be something they issue guidance on.
Posted on 5/18/20 at 7:08 pm to LSUFanHouston
Thanks LSUFan 
Posted on 5/18/20 at 7:39 pm to LSUFanHouston
Thanks for the quick reply. So under option 2 I would need to prorate the 4/25 (8/10 days) & 6/20 (2/10 days) payrolls.
I use 10 days because we don't work weekends. If I have to divide over 14, it would be 11 & 3, respectfully.
I use 10 days because we don't work weekends. If I have to divide over 14, it would be 11 & 3, respectfully.
Posted on 5/18/20 at 9:12 pm to LSUFanHouston
quote:
S Corp draws weren't included in the amount of loan proceeds, so they won't be included in amount eligible for forgiveness.
Mine were. I submitted them and was approved for the amount I applied for based on draws. I submitted all payroll information AND Owners draws.
Posted on 5/18/20 at 9:18 pm to greygoose
Well, I guess you’re paying it back?
Posted on 5/18/20 at 9:21 pm to TigerDeBaiter
quote:If made to. I will ask for forgiveness, just like I asked for the funds. If I get it great, if not, I'll get some of it forgiven, and pay off the rest with a 1% rate.
Well, I guess you’re paying it back?
Posted on 5/18/20 at 9:28 pm to greygoose
quote:
Mine were. I submitted them and was approved for the amount I applied for based on draws. I submitted all payroll information AND Owners draws.
Payroll info for your payroll and your employees as well or just your employees?
Just trying to make sure we are using the same definitions for terms.
Not saying you are wrong, a lot of bankers were doing crazy stuff especially at beginning because the guidance was so poor
Posted on 5/18/20 at 9:35 pm to LSUFanHouston
quote:
LSUFanHouston
I submitted payroll on all employees, including my salary, and a report showing my draws. Did the math based on those numbers, and submitted it. Worse case scenario, I pay back the portion they don't forgive at a 1% rate.
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