Posted on 04/03/2020 4:44:52 AM PDT by tired&retired
The Paycheck Protection Program might bankrupt our country, but sure is a blessing to virtually any business with less than 500 employees.
I'm working on an application right now for 65 employees. Basically the government is giving a loan that will be 100% forgiven that will be equal to total payroll, payroll costs, and health insurance costs for one month total times 250%.
That's the equivalent to 2.5 months payroll costs for 65 employees. (Up to a limit of annualized wages of $100,000 per employee wages)
That's over $500,000 free money.(To keep paying your employees and keep your business open)
I post this so that Freepers with businesses know what is available.
What are your clients telling you? Are they hunkering down waiting for the storm to pass? Or do they see this as an apocalyptic event?
No, that is incorrect. the original was .5 percent not 5. My understanding is that has been increased to 1% because of the pushback by big banks.
Plus the bank is the one who loans the money and then they get reimbursed - so it is more than just processing the paperwork. Their liability for loan compliancde has yet to be clarified as well.
Although still a CPA, CMA, CIA and other credentials, I am retired from the profession. Still do litigation work, expert witness, tax court, ..... I stay away from prep work.
Just doing this to help out the office that was already swamped with tax season. And helping former clients that have been friends for 40 years.
Beats doing crossword puzzles!
That is the interest rate. I understand the government is paying 5% to the banks per Mnuchin’s press statement
Yes, it is indeed still in there. So people naturally filed for unemployment in droves to get the extra pay, and they are not going to go back to work until that unemployment pay ends in at least 4 months.
But that extra pay is taxable.
“Their liability for loan compliance has yet to be clarified as well.”
Agreed. I have banks giving totally wrong information to clients. It will be a nightmare as the banks must approve the forgiveness amounts.
I used to audit banks when I was with an international CPA firm. Loan compliance areas are a nightmare.
You have to have employees.
Just heard Trump on Fox News saying that this needs to be fixed as it is very anti recovery.
It's my understanding that the applications must go through a bank that will vet the financial statements. Our company has put together a loan application that is pretty extensive in documentation. My guess is that it will have similar requirements as a mortgage. Does that preclude fraud or abuse? Probably not, but there is supposedly some accountability.
“but if you are a freelancer, could you claim that you are a small business and use this”
“You have to have employees.”
Yes. You can be one of those employees. Regs are still unclear.
However there are other programs.
Great. and I get to pay for it.
So, what happens if this is extended and the loan money runs out and the business no longer qualifies for non-repayment?
Woo Hoo. I cannot retire when I want due to the market crash. I get no benefits from this but I sure get the bill
“If you call them back and they don’t come (except for certain situations) they lose their benefits.”
I believe the new UI law as part of all this says if the employee claims virus issues they can quit and do not have to come back.
I meant to post this in response to your comment re documentation....
Your application will include:
2019 IRS Quarterly 940, 941 or 944 payroll tax reports
Monthly Payroll Reports for 2019
Payroll report must show the following for the time period above: gross wages for each employee (including the officer(s) if paid W-2 wages); paid time off for each employee; vacation pay for each employee; family medical leave pay for each employee; and state and local taxes assessed on the employee’s compensation for each employee
1099s for 2019 for independent contractors that would otherwise be an employee of your business (do NOT include 1099s for services)
Documentation showing total of all health insurance premiums paid by the Company Owner under a group health plan (include all employees and the company owners)
Document the sum of all retirement plan funding that was paid by the Company Owner (do not include funding that came from the employees out of their paycheck deferrals) - include all employees, including company owners, 401K plans, Simple IRA, SEP IRAs
Business entity documentation (e.g. Operating Agreement, Certificate of Organization, Bylaws, Articles of Incorporation)
2017, 2018 and 2019 Business Tax Returns if applicable and 2019 internal financial statements if 2019 tax return is not filed
2020 interim financial statements (balance sheet, income statement, accounts receivable aging and accounts payable aging)
Debt schedule for operating business
List of owners of the business if not included in tax return
Copy of Driver’s License for signers of business (this is likely for 20%+ owners)
Supposedly, you need to show history of the actual expenses, including payroll tax returns and/or 1099s for contractors. The amounts are based on the business’s actual historical spending on the cover categories. Now, I’m not saying there won’t be fraud, but it’s not indiscriminate either.
“Just heard Trump on Fox News saying that this needs to be fixed as it is very anti recovery.”
Yes, need to cut it off if your old job is available to you.
The government should automatically cross reference the EIN for Paycheck Program recipients with employer numbers for benefit applications. No UC benefits if your employer got $$$ to keep you employed...
Same rule should apply for Kennedy Center.
Andy, there are people who are getting more money from Uncle Sugar for sitting on their butts than they did while working for their employer.
If an employer can’t get employees to come back to work because he can’t beat what Uncle Sugar is offering for staying at home, the employer is screwed.
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