UPDATE – PPP LOAN

Newest details of the PPP loan:

  1. 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.
  2. 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.
  3. We are starting to receive information about what will be required for the forgiveness of the PPP loan:
    1. The critical period is the 8 weeks starting the day the funds are received.
    2. The application for forgiveness of the PPP loan must be filed with the bank where the loan was funded
    3. 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)
    4. 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.
    5. Interest will start the date the loan is funded.  Any unforgiven portion will have interest.
    6. 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.
    7. 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/

 

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