Here are some updates on the other ever-changing relief regulations:
COVID Pay and Payroll Tax Returns
- Click here for our latest update on the employee Social Security tax deferral in effect from September 1st through December 31st.
- Check out our update on how to handle paying your employees if they have (or think they might have) COVID and any corresponding credits that may be available. There are significant changes to the Form 941 to allow businesses to claim the new payroll tax credits, including emergency paid sick leave, expanded family medical leave, employee retention credit, Illinois minimum wage credit, and deferral of employer social security taxes. If SKDO prepares your payroll tax returns, please let us know as soon as possible if any of these situations or credits apply to you!
SBA’s Paycheck Protection Program (PPP) Loan
- Loan payments are deferred until the SBA remits the forgiveness amount to the Borrower’s lender (or 10 months after the 24-week Covered Period ends if the Borrower does NOT apply for forgiveness).
- The deadline for applying for the PPP has officially passed as of 8/8/2020.
- The President signed the Paycheck Protection Program Flexibility Act on June 5th. This bill provides some much-needed relief to small businesses who have been struggling to meet the demands and nuances of the previous guidance. We’ve outlined some of the highlights on our Paycheck Protection Program Page.
- The SBA released the updated PPP Loan Forgiveness Application and PPP Loan Forgiveness EZ Application on June 16th. See our Paycheck Protection Program Page for more details!
- The IRS issued a notice stating that no tax deduction will be allowed for any expenses later forgiven under the PPP Loan. On June 3rd, the Chairman of the House Ways and Means Committee said that he intends to clarify that the expenses are tax deductible in the next COVID-19 stimulus bill, but negotiations are still in the early stages. See our Paycheck Protection Program Page for more details!
SBA’s Economic Injury Disaster Loan (EIDL)
- The SBA has been issuing more of the advances. These payments do not have to be repaid but will reduce your PPP loan forgiveness amount. See our Paycheck Protection Program Page for more details.
- We’ve recently had a chance to review one of these loan agreements and what we saw raised a number of red flags. If you’ve been approved for an EIDL loan, we highly recommend you have a tax professional review the loan document before you sign since a number of the provisions in it made us question whether anyone would want to take the loan at all. A few of the more concerning ones include:
- You agree that you will not sell assets without SBA consent
- You authorize the SBA to review your records at any time, at your expense
- The SBA can require you to provide financials prepared by a CPA at your expense
- You agree to not make any distributions, loans, gifts, or bonuses to any owners or employees without SBA consent.
To ensure you aren’t signing away your first born child, make sure you’re reading the covenants carefully.
SKDO’s COVID Response
Our number one priority is the health and safety of our people, their families, and our clients. We hope that you and your loved ones remain safe and healthy as this global health challenge unfolds. Click Here for our full firm statement.