The SBA announced that PPP borrowers of $150,000 or less (for either first draw or second draw loans) have access to a simplified loan forgiveness process:
- SBA Loan Forgiveness Portal – Borrowers are able to submit their loan forgiveness application directly to the SBA through a streamlined portal as of August 4, 2021, rather than to their lender/bank.
- The lender/bank must opt-in to participate in this program. Therefore, check with your lender to see if you can utilize the SBA Portal. Currently, nearly 900 banks representing over 2 million borrowers have agreed to participate, however, it is expected that most large financial institutions will not participate and continue to use their proprietary portals. The SBA has provided a list of participating lenders.
- The Portal will allow borrowers to complete Form 3508S which was recently revised.
- The SBA set up a PPP customer service team to answer questions and directly assist borrowers with their forgiveness applications. The customer service team is available by calling (877) 552-2692, Monday – Friday, 5:00 AM – 5:00 PM PDT.
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PPP Loan Payments May Be Due for Some Borrowers – PPP loan borrowers have ten months after their “Covered Period” ends (anywhere between 8 and 24 weeks after receiving loan proceeds) before loan payments are required. Borrowers can apply for forgiveness at any time before the loan matures but will need to start making payments if they apply after this ten-month period. For those who received a PPP loan at the beginning of the COVID pandemic, it may be close to the end of their ten-month window, and payments may be required soon. (more…)
The Consolidated Apportionment Act of 2021, signed by President Trump in late December, authorized $285 billion of funding for a new round of PPP loans. Loans are available to borrowers that previously received a PPP loan and to first-time borrowers. The SBA released application forms last week and opened their lender portal this week to a limited number of lenders to help underserved businesses get first access to PPP funds.
The SBA’s Portal will open Friday, January 15th for lenders with assets under $1 billion, and opens Tuesday, January 19th for all other lenders. Eligibility requirements have changed from the previous program. (more…)
The COVID-Related Tax Relief Act of 2020 signed by President Trump on Sunday, December 27, 2020, offers many opportunities for borrowers. More implementation guidance is expected from both the SBA and Treasury Department regarding unanswered questions and issues that will develop as the program is implemented but for now, borrowers should consider how they may benefit from these provisions. (more…)
On December 21, 2020, Congress finally delivered much needed relief to American taxpayers. After many months of contentious negotiations, Congress passed, and President Trump signed into law, a $900 billion COVID-19 relief package with tax benefits for both individuals and business entities. Also included was a long-awaited change to the Paycheck Protection Program that will allow borrowers to deduct expenses paid with PPP funds as well as additional funding for another round of PPP loans.
We want to provide you with a brief summary of the key provisions of the bill. Watch your email and our website for additional information as we analyze the 5,600-page Consolidated Appropriations Act of 2021.
As always, please contact us if you have any questions. (more…)
New Developments – May 2021
The FTB has stated that they will not be creating any new forms or certifications for taxpayers to demonstrate that they meet the 25% drop in gross receipts test for purposes of deducting expenses paid with forgiven PPP debt. They will be updating form instructions, though we do not know when to expect those updates.
The SBA has stopped accepting new PPP applications from most lenders as general funds run out. The only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which typically work with businesses in underserved communities. The agency also has set aside $6 billion for PPP applications still in review status or needing more information due to error codes.
New Developments – April 2021
Gov. Newsom signed AB 80 on April 29, 2021. AB 80 generally conforms to the federal treatment of PPP loan forgiveness and EIDL grants, with one major exception:
- To deduct expenses paid with PPP loan forgiven amounts, the taxpayer must have a 25% reduction in gross receipts in any 2020 calendar quarter as compared to the comparable 2019 calendar quarter. If the taxpayer does not meet this threshold reduction, the expenses cannot be deducted on the California return.
- 2021-32: California’s partial PPP conformity bill sent to Governor
Expenses paid with 2020 PPP loans can be deducted on 2021 tax returns–The IRS announced a limited safe harbor for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the eligible expenses because they relied on (previously) current IRS guidance. This safe harbor is available only for taxpayers that filed their 2020 federal tax returns prior to Dec 27, 2020.
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New Developments – May 2021
The FTB has stated that they will not be creating any new forms or certifications for taxpayers to demonstrate that they meet the 25% drop in gross receipts test for purposes of deducting expenses paid with forgiven PPP debt. They will be updating form instructions, though we do not know when to expect those updates.
The SBA has stopped accepting new PPP applications from most lenders as general funds run out. The only remaining funds available for new applications are $8 billion set aside for community financial institutions (CFIs), which typically work with businesses in underserved communities. The agency also has set aside $6 billion for PPP applications still in review status or needing more information due to error codes.
New Developments – April 2021
Gov. Newsom signed AB 80 on April 29, 2021. AB 80 generally conforms to the federal treatment of PPP loan forgiveness and EIDL grants, with one major exception:
- To deduct expenses paid with PPP loan forgiven amounts, the taxpayer must have a 25% reduction in gross receipts in any 2020 calendar quarter as compared to the comparable 2019 calendar quarter. If the taxpayer does not meet this threshold reduction, the expenses cannot be deducted on the California return.
- 2021-32: California’s partial PPP conformity bill sent to Governor
Expenses paid with 2020 PPP loans can be deducted on 2021 tax returns–The IRS announced a limited safe harbor for certain businesses that received first-round Paycheck Protection Program (PPP) loans but did not deduct any of the eligible expenses because they relied on (previously) current IRS guidance. This safe harbor is available only for taxpayers that filed their 2020 federal tax returns prior to Dec 27, 2020.
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New Developments – 2/7/22
IRS letters reporting payments received for Advanced Child Credit may not be accurate
Governor Newsom wants to reinstate mandatory paid COVID sick leave for California employers effective Jan 1, 2022. Unlike 2020 and 2021, when a federal tax credit was available to employers to pay for this leave, a federal credit is not available in 2022. Governor Newsom proposes to help employers pay for this program with various “tax benefits”
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