PAYCHECK PROTECTION PROGRAM

PAYROLL PROTECTION PROGRAM
 

Congress established the Payroll Protection Program (PPP)  to provide relief to small businesses during the COVID-19 pandemic as part of the CARES Act. PPP funds are available to small businesses that were in operation on Feb. 15 with 500 or fewer employees until the program funds are exhausted. Businesses with more than 500 employees in certain industries can also apply for loans.

PPP loan recipients may request their loans be forgiven if the funds were used for eligible expenses over an eight-week period and other criteria are met. The eight-week period generally begins once a borrower receives their first disbursement from a lender, however there are alternative 8-week periods available for certain payroll costs.

Eligible Expenses Include :

  • Payroll—Salaries and Wages; Including Health Benefits as well as Parental, Family, Medical and Sick Leave.
  • Rent – As long as the lease agreement was signed before Feb. 15, 2020.
  • Mortgage Interest - As long as the Mortgage was signed before Feb 15, 2020.
  • Utilities – Electricity, Gas, Water, Internet, etc. As long as the service contract was signed before Feb 15, 2020.

The Tax Warriors at Drucker & Scaccetti have written extensively on the PPP, its tax implications, and planning options. Below are our series of blogs and other resources business owners can use to help formulate a plan of action involving the PPP.

Contact us for PPP-specific consulting on help with obtaining loan forgiveness and other post-COVID-19 tax planning.


SBA & TREASURY RESOURCES

U.S Treasury FAQ's on the Payroll Protection Program 

U.S. Treasury PPP Resource Page - includes links to interim final rules

Paycheck Protection Program Borrower Application Form

Paycheck Protection Program Loan Forgiveness Application and Instructions


IRS GUIDANCE 

The Congressional Research Service updated its report on May 13, 2020 entitled IRS Guidance Says No Deduction Allowed for Business Expenses Paid with Forgiven PPP Loans

Notice 2020-32 - on April 30, 2020, the IRS issued guidance regarding the deductibility for Federal income tax purposes expenses paid with proceeds of Paycheck Protection Program (PPP) loans.


TAX WARRIOR BLOGS AND ALERTS

May 26, 2020 - Potential Changes & Forgiveness Regulations

May 18, 2020 - Loan Forgiveness Application Released by SBA

 
 

April 24, 2020 - Additional Funding and Eligibility Guidance Updated

April 16, 2020 - PPP Loans - New Guidance for Self-Employed Taxpayers

April 8, 2020 - PPP Loans - FAQs Issued and Updated

April 3, 2020 - PPP Loan - Regulations and Final Application Released

April 1, 2020 - PPP Loan Application and Guidance Released

March 31, 2020 - Need Liquidity? A PPP Loan Under the CARES Act May Help


TAX WARRIORS IN THE NEWS

May 13, 2020 -PPP Loan Forgiveness: How SBA FAQ 46 Affects Safe Harbor Amid Deadline Panic (Philadelphia Business Journal)

April 10, 2020 - CPAs Mobilize to Save Small Clients, Protect Their Firms  (Bloomberg Tax)

April 10, 2020 - Forgive Me: How to Legally Borrow CARES Act Money and Not Pay It Back  (DigBoston.com)


THIRD PARTY RESOURCES

AICPA PPP Resource Page

May 16, 2020 - SBA Releases Paycheck Protection Program Loan Forgiveness Application: A Deep Dive (Tony Nitti, Forbes)