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News

11/18/2020 - Updates on PPP Forgiveness
Kimberly Schwaiger, CPA and Matt Barczak, CPA, both of Rehmann, provided an excellent update on the Paycheck Protection Program (PPP). Kimberly began by reviewing the timeline on the PPP loan after the CARES Act that was enacted by Congress back on March 27th. Between April 3rd and April 16th, 1.7 million loans were processed, which used up the original $349 billion of funding. On April 24th a second round of funding was made available. On August 8th the Program expires with $134 billion left unused, even after more than 5 million loans were issued. On May 15th the Loan forgiveness application was released. On June 5th the PPP Flexibility Act was signed into law, allowing borrowers to wait up to 24 weeks from the loan origination date to complete the forgiveness application. Among the many qualifying uses include payroll costs (salaries, wages, commissions, etc), employer paid group health care, employer paid retirement, employer paid state and local taxes on employee compensation. There are three types of loan applications, all seemingly dependent on the amount of your PPP loan. As of October 1st there have been 96,000 forgiveness applications out of 5 million PPP loans). There is some legislation in the US Senate that would provide automatic forgiveness for loans less than $150,000, but that Bill has been “sitting” in committee since 6/30/2020. The income from the PPP is not taxable, but practices will not be able to deduct expenses related to the PPP forgiveness (i.e. payroll, retirement, health insurance, etc.). Matt Barczak, CPA spoke briefly on the HHS Provider Relief Funds that just showed up in many of our bank accounts. Initially thought to be funds that would not need to be repaid, HHS has subsequently determined that recipients will need to document what those funds were used for. There must be proof of loss of revenue and increased expenses due to COVID-19. Recipients need not begin reporting until January of 2021. Matt referred us to the HHS website and the FAQ for further information. There was a lot of really good information packed into a short time frame.

 

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