Don’t Risk Having to Repay Your Paycheck Protection Plan (PPP) Loan
As you know, PPP support for small and mid-sized businesses was introduced on April 3, 2020. In less than two weeks, the $350 billion in first-round funding was completely depleted. An additional $320 billion was made available on April 27. Neither rollout went smoothly. So on June 4, the PPP Flexibility Act became law in an attempt to address obvious inadequacies, inconsistencies and frustrations.
Yet the questions still proliferate today – chief among them are those on loan forgiveness.
You’re not alone if you’ve worried about any of the following:
- When to file? What to document? What forms to use?
- How much of your loan will be forgiven?
- How much interest will you owe?
- Is cash compensation considered a payroll cost? Are tips, bonuses, commissions?
- Are health insurance or retirement plan eligible costs?
- For what types of businesses is owner compensation eligible?
- Should you use net or gross totals in your calculations?
- What is the maximum forgivable amount per employee?
- Will forgiveness amounts be reduced if salary or wages decrease?
- How to calculate forgiveness amounts for seasonal employees and those who decline a rehire offer? If you are self-employed, a business owner or general partner?
- Can you deduct mortgage interest, rent and utility costs? How much?
- How to determine safe harbor or exemption eligibility?
- Are repayments required while awaiting a forgiveness determination?
- What is the deadline for repayment?
- What if your application is denied?
The good news is that, although loan forgiveness is complicated, there is no need to rush through the forgiveness process and risk errors that might jeopardize eligibility.
In submitting early applications, many have misunderstood requirements, misjudged documentation rules, miscalculated salaries and costs. As rejection and resubmission scenarios remain undefined, it’s critical to ensure that your forgiveness application is as strong as possible.
Therefore, we urge you, and all our clients, to avoid this risk. Repaying a loan of any size is an unnecessary burden when you can leverage the knowledge and experience of our specialists. The assistance we offer is comprehensive and, like our service options, our fees reflect only the support you need. Discover how we can simplify and streamline the loan forgiveness process by contacting your PKF O’Connor Davies relationship manager or e-mailing us at: [email protected].
Ronald DeSoiza, CPA, ABV
[email protected] | 914.421.5604
Jim Szumlaski, CPA
[email protected] | 845.565.5400