Are you an employer who received a PPP loan and were waiting to find out if the IRS guidelines of non-deductibility were going to remain, or if Congress was going to make an adjustment? Well, I have great news for you!
As of Monday, December 21st, Congress passed a new appropriations bill discussing issues related to COVID and passing additional benefits to individuals, married families, as well as businesses. You will be able to receive an economic impact payment of $600 if you’re an individual making up to $75,000 or $1200 for a married couple making up to $150,000. The benefit will also be applied for children, and it will be $600 for each child. They also are extending the $300 additional amount for unemployment benefits if you are currently getting unemployment for lack of work.
But the main thing that I’m excited about is the PPP forgiveness. Many of us in the industry who’ve been helping clients get the loans and then preparing to ask for forgiveness were frustrated that the IRS was stating that any amounts used for forgiveness would not be able to be expensed on your business tax return.
This would therefore increase your taxable profit and was not what the Congress had originally intended when passing the legislation. However, the IRS had been adamant that it would be non-deductible if forgiven. But with the passage of this legislation, it will now be forgiven.
And they are also going to offer a second round of PPP funding. Those who qualify would have 300 employees or less, and some of them also would need to have a reduction of income of at least 25% in a quarter over the previous year’s same quarter.
But there’s potentially additional funding for you available as well. So be sure to talk with your CPA or look into the new legislation that was just passed again on December 21st allowing additional compensation for individuals, married couples and businesses.
If you have any additional questions or need help with any of this PPP funding, give us a call at (310) 534-5577. You can reach us at firstname.lastname@example.org, or find us at affordablebookkeepingandpayroll.com, or for short, www.abandp.com. We’re here to help you through this as well!https://affordablebookkeepingandpayroll.com/paycheck-protection-program/
Links to prior blogs on PPP: