Jan. 12, 2021 COVID Round Tables (Part 5)

The SBA is again accepting and processing applications for PPA loans. Joining us today is Nigel Nabuurs, product manager at Patriot Software Payroll and Accounting, sponsors of our COVID-19 Round Tables. 

The COVID-19 Advisor Resource Page on our website contains valuable information for you and your clients in navigating through these difficult waters as well as recordings of previous round tables. And articles about our round tables are being published on the Woodard Report website. There is a five-article series about our January 5 round table with Gene Marks on the Woodard Report website.Joe Woodard: So as we discussed last week, PPP loan criteria remains the same. If the borrower does not apply for loan forgiveness, payments are deferred10 months after the end of the covered period: either eight weeks or 24 weeks. Owners’ compensation is still limited to $100,000. Guaranteed payments are subject to self-employment tax; therefore, they are included in the payroll calculation. 

By the way, we call this a round table, not a monologue. We are in a room full of experts. Our composite knowledge is powerful. 

EIDL loans are not forgivable but the advances are forgivable. And as you know, if you were approved for the loan, then your advance was rolled into the loan. Last time Gene said that your advances that didn't convert to a grant and the advances that did revert to a grant previously limited your PPP lending. They were deducted from your total amount of PPP lending. This has now changed. And the grant should be recorded as “other income.” 

The employee retention credit is not only for shut-down companies. It's just about that percentage of reduction. 

Nigel Nabuurs: It's either/or. 

Joe Woodard: We have a definitive answer about PPP loans: the PPP should continue as live until it's actually officially forgiven.  

Round Table Guest: For anybody who wants to do a little bit more research on the PPP and wants to know what year it should be included from a tax perspective: Read Revenue Procedure 2020-51. That one actually addresses it. It’s six pages long, and it actually says that even if all you have is the intent to submit forgiveness, but you haven't submitted for forgiveness, as of December 31 you can still include what you anticipate as forgiveness in your 2020 number, You can apply your revenue and expense in the same year.  

Joe Woodard: Okay, so it isn't quite as cut and dry. So thank you for that. We have articles available in our COVID-19 Resource Center and the Woodard Report that provide good information on the PPP, EIDL, employee retention credit and other matters related to coronavirus financial relief. 

Next week Gene Marks will return with more answers to questions raised in the last two sessions.  

Thanks, everybody. Hang in there. I know it's probably the toughest January in your entire career. We’ve got your back. If you need anything at all, let us know. Thank you, Nigel. We appreciate you and Patriot helping us out. Take care, folks. Have a good day. 

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