Here are some updates on the other ever-changing relief regulations:
COVID Pay and Payroll Tax Returns
- Click here for new opportunities to claim the Employee Retention Credit under the Consolidated Appropriations Act 2021!
- Click here for our latest update on the employee Social Security tax deferral that was in effect from September 1st through December 31st of 2020. The repayment period has been extended through 12/31/2021.
- 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
- PPP loans are no longer taxable! The forgiveness will not be included in income and the expenses used to forgive the loan will be allowed as tax deductions.
- 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 is 03/31/2021.
- The President signed the Consolidated Appropriations Act on 12/27/2020. This law includes a number of PPP-related provisions, which we have summarized for you here.
- 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 in our posts here–Part 1 and Part 2.
- 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!
SBA’s Economic Injury Disaster Loan (EIDL)
- The SBA is reopening the EIDL advance grant program to eligible businesses who experienced a 30% or greater loss of income due to the pandemic AND are located in a low income community. These payments do not have to be repaid and will no longer reduce your PPP loan forgiveness amount.
- We’ve recently had a chance to review one of the EIDL 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.