A. Sungil Noh, CPA
Certified Public Accountant
CPA NEWS
Gold has outperformed stocks, bonds, and real estate this century - 12/6/24
Converting rental or vacation home into a primary residence - 9/23/24
For those taxpayers selling their primary home and moving into their vacation home, a future sale of the vacation home (new primary) may carry tax consequences. The Housing and Economic Recovery Act of 20085 modified Sec. 121 to require allocation of gain to periods of “nonqualified use” of the home.6 Thus, the classification of a home’s holding periods as either qualified or nonqualified is critical. Qualified holding periods are when the taxpayer uses the home as their primary residence, as well as any portion of the five-year period preceding the date of sale that is after the last date on which the taxpayer uses the property as the primary residence.7
Otherwise, a period of nonqualified use is “any period (other than the portion of any period preceding January 1, 2009) during which the property is not used as the principal residence of the taxpayer.
Read more: click The Tax Adviser.
Cost segregation to save taxes - 8/29/24
Cost segregation is a tax idea that allows real estate investors to accelerate the depreciation of their investment property by segregating land improvement for a 15-year depreciation, personal property for a 5- or 7-year depreciation, and certain fixtures a shorter useful life (a 5- or 7-year depreciation).
To read more and see an example of segregation, visit: Corvee.
New reporting requirement by Financial Crimes Enforcement - 7/15/24
FinCEN has published the following Small Entity Compliance Guide to help small entities comply with the requirements of the Beneficial Ownership Information Reporting Rule. Basically, if your business is not a financial institution, has less than 20 employees, and has revenues of less than $5 million, you need to report the owner's
information.
For more information (Guide):
https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf
New overtime exemption rule (ADP) - 5/14/24
On April 23, 2024, the U.S. Department of Labor (DOL) released a final rule that will increase the minimum salary required to qualify for exemptions from the FLSA’s overtime requirements for executive, administrative, professional, and highly compensated employees. To read more, click the following site:
https://sbshrs.adpinfo.com/blog/new-overtime-exemption-rule-5-key-facts-you-need-to-know
Year-end tax-planning tips for 2023 (Fidelity) - 12/1/23
Do you need some help to reduce your taxes? Click the following site to get some ideas:
https://www.fidelity.com/learning-center/wealth-management-insights/year-end-tax-tips
Earn 5% or more on your money - 5/3/23
Did you know that nowadays you can earn more than 5% easily on the money you have?
Even if you have money in the business checking account, you can always open a brokerage account (with Fidelity, etc.) to buy short-term U.S. treasuries to earn more than 5% (generally 3 months and you can always sell even before the maturity without a material penalty, better than CDs).
The interest rate (5.18% today) is actually higher if you consider that you do not pay the state tax. For more information, visit:
https://www.fidelity.com/fixed-income-bonds/individual-bonds/us-treasury-bonds
The new lease standard (ASC 842) is effective from 2022 - 10/24/22
Under the new lease standard, all applicable leases must now be recognized as both an asset and offsetting liability for future lease payments. This is a big difference from the previous standard, where operating leases were not reflected on the balance sheet. Visit the following sites for more information:
https://www.cpajournal.com/2017/10/04/practical-illustrations-new-leasing-standard-lessees/
https://www.leasecrunch.com/the-new-lease-standard-everything-you-need-to-know
https://leasequery.com/blog/sublease-accounting-asc-840-asc-842/
The stock market could rally for another few months (Morgan Stanley's Mike Wilson) - 10/21/22
There could be a summer stock market rally from an oversold level - 6/19/22
It Seems the Stock Market Crash Started and Will Get Worse - 6/3/22
https://seekingalpha.com/news/3840592-fund-manager-jeremy-grantham-sees-sp-nasdaq-dropping-double
New Jersey Mandatory Retirement (Secure Choice Savings) Program - 4/2/22
This Secure Choice Act goes into effect in 2022. It mandates that employers with 25 or more employees must offer a retirement savings plan. Businesses have the option to enroll in the state-run Secure Choice program, face substantial penalties, or be prepared with an alternative solution.
Read more: https://www.adp.com/resources/articles-and-insights/articles/n/nj-secure-choice.aspx
Morgan Stanley Warns of a Stock Market Correction - 3/21/22
Morgan Stanley’s chief investment officer warned that last week’s stock-market surge was an economic calm before the storm — and that investors should take the opportunity to sell. Read more:
https://nypost.com/2022/03/21/morgan-stanley-chief-advises-selling-after-stock-market-rally/
Email News - Paid Sick Leave Requirements - 11/3/21
Recently, we received several inquiries about paid sick leave laws in various states. Generally, employers are required to provide
up to 40 hours of paid sick leave per year to employees. You can read more about the laws by visiting the following sites.
New Jersey
New York
https://www.ny.gov/programs/new-york-paid-sick-leave
Massachusetts
https://www.mass.gov/info-details/earned-sick-time
California
https://www.nolo.com/legal-encyclopedia/california-passes-paid-sick-leave-law.html
Why You Should Invest - 8/9/21
Over the years, I have been telling my clients to invest in stocks and real estate if they do not want to work beyond their retirement age of 65. I have been saying that because some of my clients who have invested, especially early, enjoy their retirement by traveling and relaxing without working continuously like most other people.
If you invest in stocks of good companies and in real estate properties with good rental income, those companies and properties will work for you for your retirement. It is not that hard to find good companies around you and also income-producing properties. The only thing is you have to learn to wait for years to overcome the market fluctuation. Historically, if you wait, any market crash was followed by an even much higher market.
I have found a YouTube on this subject matter, John Lee of Meritz Asset Management who explained this and other important educational matters in investing: https://www.youtube.com/watch?v=zlrF3aR2R7c&t=5173s
Email News - Tax Day for Individuals Extended to May 17, 2021, 3/24/21
The following tax authorities have extended tax return deadlines for individual tax returns.
Federal (IRS) – May 17
The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021.
New York – May 17
New York State has extended the due date for personal income tax returns and related payments for the 2020 tax year to May 17,2021. This extension is limited to personal income tax returns for individuals only. The deadline for payment or deposit of any other type of state tax or filing of any other state information return remain unchanged. This extension does not apply to estimated tax payments for the 2021 tax year that are due on April 15, 2021 still are due on April 15, 2021. This extension does not apply to business tax returns.
New Jersey – May 17
New Jersey has extended the 2020 income tax filing and due date for individuals to May 17, 2021. This extension includes any tax payments due with a return. This extension does not include first quarter estimated payments, which are still due by April 15, 2021.
Massachusetts – May 17
Massachusetts has determined that individual personal income tax returns and payments for the 2020 tax year otherwise due on April 15, 2021 will now be due on May 17, 2021. This extension does not apply to estimated tax payments or business tax returns.
California – May 17
California has extended the state filing and payment deadline for individuals to May 17, 2021. This extension does not apply to estimated tax payments due on April 15, 2021 or business tax returns.
For more information:
Email News - American Rescue Plan Act of 2021, 3/12/21
The American Rescue Plan Act of 2021 is a $1.9 trillion economic stimulus bill passed by Congress and signed into law by President Joe Biden on March 11, 2021, to speed up the United States' recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession.
The following site summarizes the major points of the Act:
If you believe you are qualified for the benefits, you should learn the details by researching online with subjects, which there are many sites explaining the rules. For the case of Employer Retention Credits (ERC), you can prepare a worksheet to summarize the payroll, forgiven PPP payroll, and qualifying payroll for us to amend Form 941 to claim the credit.
It is our busy audit and tax season at the moment. If we have to explain the rules and prepare the basic worksheets, we need to charge our time because we have more than 100 companies to deal with. To save time and money, we recommend you read and prepare some basic worksheets.
Email News - Consolidated Appropriations Act, 2021, 1/29/21
As most of you know this Act as for the $600 and 2nd PPP, there are also many other provisions that are still interpreting and fine-tuning. You could read some highlights at:
https://www.jdsupra.com/legalnews/key-provisions-of-the-consolidated-2031866/
Even though the IRS is still finalizing some provisions, the Act extended and revised some of the rules from the previous Cares Act so your business may now qualify to get some assistance. Previously, you cannot claim Employee Retention Credits (maximum $5,000 per employee per year) if you received a PPP or your business revenues did not reduce by more than 50%. Now, you can claim this credit even if you got a PPP. You can go back to 2020 and claim this credit.
In addition, the Act extended this credit until 6/30/21 and the revenues test is now 20%, not 50% (still compare to the 2019 revenues and not 2020). The maximum credit is $7,000 per employee per quarter ($14,000 until 6/30/21). To get more information, visit:
https://www.cohnreznick.com/insights/employee-retention-credit-now-available-to-ppp-recipients
For your information, we are providing this information on a pro bono basis. You should research online by yourself to understand the details of the Act and its provisions. There are many sites available so you can learn and follow the rules. You should contact us only if you want to confirm or review your work by us so you can claim the credits, in which case we charge the time we spend for you.
Email News - 2nd Round of PPP, 12/29/20
On December 27, 2020, a $900 billion COVID-19 relief package was passed. Included in that amount is $284 billion for a second round of the Paycheck Protection Program (PPP).
First-time borrowers must have 500 or fewer employees and meet other eligibility criteria. In addition, second PPP loans are available to businesses that received a PPP loan previously if they have 300 or fewer employees and meet other eligibility criteria. PPP loans are available until March 31, 2021, or until all allocated funds are disbursed.
Limited Eligibility for Second Round PPP Loans: The second round of PPP loans is available to not only first-time qualified borrowers but also to borrowers that previously received a PPP loan. PPP loans are limited to businesses that (i) employ no more than 300 employees (down from 500) or meet an alternative size standard; (ii) have used the entire amount of their first PPP loan or will use such amounts, and (iii) had gross receipts during Q1, Q2 or Q3 2020 that were at least 25 percent less than the gross receipts from the same quarter in 2019 (applicants may use Q4 2020 if they apply after January 1, 2021). If the business was not in operation for a portion of 2019, then the comparable quarters may be different.
More information:
https://www.natlawreview.com/article/paycheck-protection-program-round-2-highlights
Email News - Changes in PPP Loan Forgiveness, 6/4/20
Both the House and the Senate passed a bill to change the terms of PPP loan forgiveness last night, which is expected to sign it by Donald Trump. The following summarized the changes:
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Current PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. New PPP borrowers will have a 24-week covered period, but the covered period can’t extend beyond Dec. 31, 2020. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
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Under the language in the House bill, the payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met. Rep. Chip Roy (Texas), who co-sponsored the bill in the House, said in a House speech that the bill intended the sliding scale to remain in effect at 60%. Senators Marco Rubio and Susan Collins indicated that technical tweaks could be made to the bill to restore the sliding scale.
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Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31, a change from the previous deadline of June 30.
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The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good-faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
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New borrowers now have five years to repay the loan instead of two. Existing PPP loans can be extended up to 5 years if the lender and borrower agree. The interest rate remains at 1%.
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The bill allows businesses that took a PPP loan to also delay payment of their payroll taxes, which was prohibited under the CARES Act.
Email News - PPP 8 Weeks Starting Period & No Return Employees, 5/7/20
8 Weeks Starting Period
Many people asked us when the eight (8) week forgiveness period starts. It actually starts when you receive the PPP loan money. You need to start using this loan money no later than ten calendar days from the date of loan approval.
More information:
Employees Who Refuse to Return
Businesses that received PPP loans can exclude laid-off employees from loan forgiveness reduction calculations if the employees turn down a written offer to be rehired (get a written document).
More information:
Email News - PPP Forgiveness Guide, 5/4/20
Congratulations to those of you who got the PPP loans. For those who are still waiting for the loans, we wish you to get them ASAP.
Now, we are receiving questions as to how the process of loan forgiveness works. You will get an application for loan forgiveness that will be processed by your bank. They will provide you with instructions.
After you submit your application for forgiveness, your bank is required to provide you with a response within 60 days. You will need to provide the required documents again to prove the forgivable expenditures.
Besides your bank's instructions, the following site summarized in detail how to determine the forgivable amounts:
https://bench.co/blog/operations/ppp-loan-forgiveness/
Email News - Senate Approves $370B in Additional Funding, 4/21/20
The Senate on Tuesday approved $370 billion in additional funding for small businesses through programs administered by the U.S. Small Business Administration (SBA) as part of a new COVID-19 pandemic relief bill.
The relief bill passed in the Senate by unanimous consent and moves to the House, which will convene to consider the package, with a vote expected Thursday. President Donald Trump said in a tweet that he would sign the legislation.
Email News - $5,000 Grant from U.S. Chamber of Commerce Foundation, 4/20/20
One of our clients informed us of the following program offered by the U.S. Chamber of Commerce Foundation.
The US Chamber of Commerce Foundation has opened Small Business Grants of $5,000. Funded by corporate and philanthropic partners, the Save Small Business Fund is a collective effort that provides $5,000 grants to as many small business employers as possible. The hope is that these supplemental funds will help you get through the next days and weeks as we battle this unprecedented time.
To Qualify, a Small Business Must:
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Employ between 3-20 people
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Be located in an economically vulnerable community
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Have been harmed financially by the COVID-19 pandemic
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Enter Zip Code of business location to see if you are eligible: https://savesmallbusiness.com/
How to Apply:
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Short app to go live on April 20, 2020 at 12:00 pm PT on this site (option to receive email notification): https://savesmallbusiness.com/
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Application will be short (approx. 10 minutes to complete)
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All you need is your business’s W-9 form https://www.irs.gov/pub/irs-pdf/fw9.pdf
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Grants awarded on a rolling/weekly basis, only need to apply one time to be eligible for funding.
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Once grantee is notified and has submitted payment information, it will take 3-5 days to process payment.
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Number of grants awarded will be scaled in proportion to demand and available funds.
Use of Funds:
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Must be used toward business expenses.
Email News - $1,200, PPP & NOL, 4/16/20
$1,200 Payments – Find Out the Status
The IRS announced Wednesday the launch of its “Get My Payment” website, which permits taxpayers to check on the date they can expect to receive their economic impact payment and update their direct deposit information.
No More Money for PPP
The U.S. Small Business Administration stopped accepting applications for the Paycheck Protection Program after exhausting the initial $349 billion in funding provided by Congress to fund forgivable loans to small businesses impacted by the COVID-19 pandemic.
The SBA, which is administrating the program with Treasury, posted a statement on its website saying that it is currently unable to accept new PPP applications based on available appropriations funding. The SBA also said it is unable to enroll new PPP lenders at this time.
People are urging Congress to swiftly approve additional funding for the program.
The Small Business Administration (SBA) warned Wednesday night that it soon will no longer be able to extend loans to small businesses as negotiations between Treasury Secretary Steven Mnuchin and Senate Democratic Leader Charles Schumer (N.Y.) failed to produce a deal.
Company Losses Can Be Carried Back 5 Years for Refund
The CARES Act, which was signed by President Trump on March 27, 2020, amends the net operating loss (NOL) provisions to allow for the carryback of losses arising in taxable years ending after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year of such loss.
Email News - IRS Free File, 4/10/20
The IRS has set up a website to register for Economic Impact Payments (up to $1,200 for individuals or $2,400 for married couples and $500 for each qualifying child). If you filed your tax return 2018 or 2019, receiving the Social Security monthly payment or provided your bank information via your tax returns, you do not have to do anything. You will receive the payment through your bank or a check automatically. The payments will start next week.
For those of you who do not normally file a tax return or receive the monthly Social Security payment, the IRS has set up a website
to register for the payment. Visit the following site to register:
https://www.freefilefillableforms.com/#/fd/EconomicImpactPayment
Email News - Foreign Owned Companies, 4/7/20
With respect to the SBA loan programs (including the PPP), there is the affiliation rule that requires a company to include employees of both its domestic and foreign affiliates to count 500 or fewer employees. You can read it from the following link:
However, The National Law Review provided the following information:
Applicants in the Small Business Administration’s (SBA) Business Loan Programs (which include the Paycheck Protection Program (PPP)) are generally subject to the affiliation rule in 13 CFR Section 121.301, subject to certain statutory waivers. These rules provide that in determining a concern’s size, the SBA counts the employees of both the concern whose size is at issue and all of its domestic and foreign affiliates, regardless of whether the affiliates are organized for profit. Based on this language, an employer would be required to count all employees (including those of foreign affiliates) in determining whether an entity has 500 or fewer employees for the PPP.
Yet in an Interim Final Rule, the SBA has indicated that an entity generally is eligible for the PPP if it, combined with its affiliates, has 500 or fewer employees whose principal place of residence is in the United States. This language in the Interim Final Rule directly conflicts with the way employees are counted under the affiliation rules in 13 CFR Section 121.301.
We are hoping that the SBA will provide clarifying guidance, but it appears (at least for now) that domestic entities with a foreign affiliate(s) who previously thought they did not qualify for the PPP because of being required to count foreign employees may indeed be eligible for loans under the PPP.
Last night (Monday, 4/6/20), the SBA published Frequently Asked Questions on the PPP and had the following related information:
5. Question: Are borrowers required to apply SBA’s affiliation rules under 13 C.F.R. 121.301(f)?
Answer: Yes. Borrowers must apply the affiliation rules set forth in SBA’s Interim Final Rule on Affiliation. A borrower must certify on the Borrower Application Form that the borrower is eligible to receive a PPP loan, and that certification means that the borrower is a small business concern as defined in section 3 of the Small Business Act (15 U.S.C. 632), meets the applicable SBA employee-based or revenue-based size standard, or meets the tests in SBA’s alternative size standard, after applying the affiliation rules, if applicable. SBA’s existing affiliation exclusions apply to the PPP, including, for example the exclusions under 13 CFR 121.103(b)(2).
This information still not clear for the PPP affiliation rule because The National Law Review had already interpreted the SBA's Interim Final Rule on Affiliation that a company has 500 or fewer employees whose principal place of residence is in the United States is eligible. Thus, hopefully the lenders, particularly banks, get a clear interpretation from the SBA so they can process the PPP for foreign-owned companies.
Email News - Various States' Grants, Loans, Tax Reliefs. Etc., 4/6/20
ow, various states and cities are coming out with their own small grants, loans, tax reliefs, etc. for small businesses. Thus, you should review their assistances.
NJ Economic Assistance for Businesses
NYC Assistance & Guidance for Businesses
https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page
MA Resources & Guidance for Businesses
https://www.mass.gov/info-details/covid-19-resources-and-guidance-for-businesses
CA Financial and Technical Assistance for Small Business
https://business.ca.gov/coronavirus-2019/
For other states and cities, you should search online for the information.
Email News - PPP & Foreign Owned Companies, 4/6/20
It is a real mess at the moment for processing the PPP and EIDL loans by the SBA, banks and the government as they are not really ready.
It appears nobody got the $10,000 grant under the EIDL program even though they said they will send out a check within 3 days after applying and the program started more than 2 weeks ago. Interpretations and interim regulations keep coming out but nothing has been finalized as of yet.
At any rate, another mess area is that the PPP loans related to foreign-owned companies. As I have been paying attention to this subject from our last CPA News, I was able to locate this information published by The National Law Review today. Here is what it says:
The Small Business Administration (“SBA”) in its implementation of the CARES Act just released an updated loan application form for borrowers who want to avail themselves of Title I – Paycheck Protection Program (“PPP”) loans. This form may be found here.
In this updated form, the SBA removed the indication which was included in the previous form that if the borrower has any 20%or more owner that is not the U.S., the loan will be denied.
As a result, all US businesses, whether or not they are owned by foreign companies should be able to avail of the Title I – PPP loan program so long as the size eligibility requirements (no more than 500 employees (inclusive of affiliates) or “small business issuer” per the NAICS classification) and other eligibility requirements are met.
So far this is what we learned and nobody knows what will be the final regulations. So, we suggest that you talk to your bank with this information to see if they can accept your application. Visit the website for the above explanations:
Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation. The information is not advice and should not be treated as such. You are responsible to ensure the information is ultimately correct and complete. Thus, we accept no liability from any action you may take from the information provided.
Email News - Economy Injury Disaster Loan (EIDL) Program, 4/3/20
We have informed you about the Economy Injury Disaster Loan (EIDL) Program on 3/23/20 and linked the Small Business Association (SBA) site for more information. However, we are getting more questions about the EIDL program. Thus, let us summarize it here so you have a better understanding.
SBA provides low-interest (up to 3.75%) loans to small businesses that have been impacted by the coronavirus. The loans for up to $2 million are for working capital for economic support to small businesses to help the temporary loss of revenue. The repayment term is up to 30 years. Small (less than $200,000) loans are also available without personal guarantees.
The principal and interest payments can be delayed up to four years. Once you get the loan, you can refinance your EIDL loan into a Paycheck Protection Program (PPP) loan. When you apply for the EIDL loan, you will get a grant advance of $10,000 that will be provided within 3 days.
This grant does not need to be repaid, even if your loan application is subsequently denied, and if spent on "maintaining payroll and other operating expenses." To be eligible for the grant, you must have been in business on 1/31/20. This grant will be reduced the PPP forgivable loan.
There are no upfront fees or early payment penalties charged by SBA. The replacement term will be determined by your ability to repay the loan. Generally, loans over $25,000 require collateral but SBA will not decline a loan for lack of collateral. Generally, it takes 18-21 days to get approval and another 5 days to get money.
Apply for the loan directly online through SBA's secure page: https://www.sba.gov/page/disaster-loan-applications
Once you have completed the information and submitted your application, you will receive a confirmation email with an application number. If the SBA approves your loan, they may request additional information before closing.
Email News - Latest Rules & Resources of PPP, 4/3/20
The following are the latest interpretations, regulations, and resources (attached) of loans under the CARES Act.
SBA Issues an Interim Final Rule for PPP
Attached Are the Latest PPP Loan Application, AICPA PPP Loan Worksheets and Loan Snapshots
AICPA prepared its own versions of PPP loan worksheets (calculators), which are attached here, and they have incorporated the latest PPP regulations as of April 2.
Latest PPP loan application
AICPA PPP payroll calculators for loan application
The PPP provides three scenarios for calculating maximum loan amounts depending on how long the business has been in operation and whether it’s seasonal. They’re designed so that your client can complete them following the steps outlined in the calculator.
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PPP Loan Calculator – Non-seasonal & In business 2/15/19 – 6/30/19
This calculator will apply for most businesses that operated in 2019.
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PPP Loan Calculator – Nonseasonal & NOT in business 2/15/19 – 6/30/19
This calculator will apply for new businesses.
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PPP Loan Calculator – Seasonal business
This calculator will apply for clients that don’t operate year-round.
SBA loan snapshot
A resource to help your clients get a basic understanding of SBA loan options
PPP Eligibility Under the Affiliates Rules (May Apply to Foreign-Owned Companies)
Applicants under the PPP will be aggregated with their “affiliates” for purposes of determining whether they constitute an eligible small business for purposes of counting employees against the 500-person threshold.
Entities (whether U.S. or foreign) are considered affiliates where one has the power to control the other, or the entities are under the common control of a third party, whether by ownership, common management or contractual relationships. Non-U.S. employees of an affiliate count toward the 500-employee threshold.
For example, a company with 100 employees fails to meet the 500-employee limit if its sponsor also owns three other portfolio companies with 150 employees each, even if all of the employees of these other companies report to work abroad.
Confirm Eligibility and Contact Your Lender Now
PPP loans under the CARES Act will be disbursed by banks directly to borrowers, not by the SBA itself. Therefore, SBA will need to create and issue final rules before banks will make PPP loans. The SBA's interpretation of the CARES Act language stating "in addition to small business concerns" could be an interesting development as final rules are developed.
By a clear reading of the statute, the PPP program should be available to businesses that meet the above employee count criteria "in addition to small business concerns" that qualify under SBA's other regulations (i.e., annual receipts), even though they may exceed 500 employees.
An open question exists about how SBA will implement that language. While banks cannot make these loans until they know the final rules, businesses should not wait until the final implementation of SBA's regulations to contact their lenders.
Economic Injury Disaster Loan Program (EIDL)
BA's regulations at 13 CFR 123.300, et. seq. describe who is eligible for SBA's EIDL loans and confirm that EIDL loans are available only if the organization was a small business or a private non-profit organization at the time the declared disaster commenced. Under SBA's size regulations, it confirms that an applicant must meet the following two criteria to be a small business eligible for EIDL loans:
1. Size of the applicant alone (without affiliates) must not exceed the size standard designated for the industry in which the applicant is primarily engaged; and
2. Size of the applicant combined with its affiliates must not exceed the size standard designated for either the primary industry of the applicant alone or the primary industry of the applicant and its affiliates, whichever is higher. These size standards are set forth in §121.201.
EIDL loans offer up to $2 million in assistance, carry an interest rate of 3.75 percent, and have a maximum term of 30 years.
Once you got the EIDL loan, you can refinance your PPP loan from your existing EIDL loan. Thus, some people are applying the EIDL, which is already set up and processing, while PPP loans are still setting up and working out by banks and the SBA at the moment.
Newsletter Disclaimer - We are distributing publicly available information on a pro bono basis so you can be abreast of the latest developments in this difficult situation. The information is not advice and should not be treated as such. You are responsible to ensure the information is ultimately correct and complete. Thus, we accept no liability from any action you may take from the information provided.
Email News - PPP Loan Applications & Latest PPP Information, 4/1/20
For applications for small-business PPP which to be opened on Friday, 4/3/20, and more latest PPP information, visit:
Email News - $1,200 Payment & PPP Worksheet v2.1, 3/31/20
Attached is the PPP Worksheet v2.1, and the following is about the $1,200 stimulus payment.
(Download the PPP Worksheet v2.1 - Sample)
Economic impact payments:
What you need to know
Check IRS.gov for the latest information: No action needed by most people at this time
IR-2020-61, March 30, 2020
WASHINGTON – The Treasury Department and the Internal Revenue Service today announced that distribution of economic impact payments will begin in the next three weeks and will be distributed automatically, with no action required for most people. However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.
Who is eligible for the economic impact payment?
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child.
How will the IRS know where to send my payment?
The vast majority of people do not need to take any action. The IRS will calculate and automatically send the economic impact payment to those eligible.
For people who have already filed their 2019 tax returns, the IRS will use this information to calculate the payment amount. For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the return filed.
The IRS does not have my direct deposit information. What can I do?
In the coming weeks, Treasury plans to develop a web-based portal for individuals to provide their banking information to the IRS online, so that individuals can receive payments immediately as opposed to checks in the mail.
I am not typically required to file a tax return. Can I still receive my payment?
Yes. People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment. Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax.
How can I file the tax return needed to receive my economic impact payment?
IRS.gov/coronavirus will soon provide information instructing people in these groups on how to file a 2019 tax return with simple, but necessary, information including their filing status, number of dependents and direct deposit bank account information.
I have not filed my tax return for 2018 or 2019. Can I still receive an economic impact payment?
Yes. The IRS urges anyone with a tax filing obligation who has not yet filed a tax return for 2018 or 2019 to file as soon as they can to receive an economic impact payment. Taxpayers should include direct deposit banking information on the return.
I need to file a tax return. How long are the economic impact payments available?
For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.
Where can I get more information?
The IRS will post all key information on IRS.gov/coronavirus as soon as it becomes available.
The IRS has reduced staff in many of its offices but remains committed to helping eligible individuals receive their payments expeditiously. Check for updated information on IRS.gov/coronavirus rather than calling IRS assistors who are helping process 2019 returns.
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