Newest details of the PPP loan:
- Although the government funding ran out earlier, the President signed additional funding into law today (4/24/2020). If you have applied for the PPP or the EIDL and were told that there was no more funding available, please check back with your bank.
- If you are an independent contractor (i.e. you are not paid through a W-2) or self-employed, you could be eligible for the PPP even if you do not have employees of your own. Check with your bank about applying for the PPP for the self-employed, or get with your CPA.
- We are starting to receive information about what will be required for the forgiveness of the PPP loan:
- The critical period is the 8 weeks starting the day the funds are received.
- The application for forgiveness of the PPP loan must be filed with the bank where the loan was funded
- The most that can be forgiven to any one employee is $15,385 (If you are Self Employed with no employees you count as the one employee)
- It is suggested that you open up a separate checking account to track the funds. You will need to provide support for how the funds are spent.
- Interest will start the date the loan is funded. Any unforgiven portion will have interest.
- If your number of full time equivalent employees go down during the 8 weeks, or if your salary is reduced by more than 25%, then the forgivable portion will be reduced.
- At least 75% of the funds must be on payroll costs. The remainder can be spent on rent, mortgage interest or utilities.
More information regarding the PPP forgiveness will be coming out at a later date, and so this information is subject to change in the future as more guidance comes out. Please check our blog for the most up to date information: https://www.logginscpa.com/blog/
