Pending PPP Rule Changes
Passed by the House last Thursday, if the Senate passes H.R. 7010, Paycheck Protection Program Flexibility Act of 2020, the following changes could drastically affect the way you spend your PPP funds. Proposed changes include:
- Time frame to use funds extended from 8 weeks to 24 weeks.
- Percentage of funds to be used for payroll reduced from 75% to 60%.
- Loan terms extended from 2 years to 5 years.
- Addition of more exemptions for a reduction in employee head count.
The Senate’s version is looking to extend the covered weeks to 16 weeks and maintain the 75% threshold of payroll costs. A final bill is expected within the week, and we will provide additional guidance at that time.
Home Office Deduction
For the past few months, many people have had a drastic change of office scenery. Those who are used to being in the office for +40 hours a week have now shifted to working from home.
With this change, some may wonder if the home office deduction applies to their situation. Unfortunately due to the Tax Cuts and Jobs Act,
you cannot deduct home office expenses if you are an employee.
For those who are self-employed or independent contractors, you can continue to deduct qualifying home office expenses.
Read more here
on how to calculate the home office deduction.
At the end of April, the Financial Accounting Standards Board issued a proposed Accounting Standards Update (ASU) that would grant a one-year effective date delay for certain stakeholders applying leases and revenue recognition guidance.
The board voted on May 20 regarding the pushback of the lease standards effective date for private companies and private NFPs. The new effective date is now:
- Fiscal years beginning after 12/15/2021 (initial calendar year ended 12/31/2022)
- Interim periods within fiscal years beginning after 12/15/2022
It's important to note that early application will continue to be permitted. Our team is continuing to identify lease standard application tools to aid clients, and we are ready now to assist clients in understanding the lease standards and the impact their adoption will have on private businesses. Please reach out to us with any questions you may have.
PUA Data Breach
A small data breach exposed Social Security Numbers, Addresses and Names of about two dozen Ohio Pandemic Unemployment Assistance (PUA) program applicants inadvertently on May 15th, 2020. Deloitte investigated and declared preventative measures stating that they have no reason to believe that anyone’s information had been improperly used, but they are offering credit monitoring services for 12 months to all PUA applicants.
We recommend any clients that are worried their personal information may have been exposed should carefully monitor bank accounts and take advantage of the free credit monitoring service.
Main Street Lending Program
The Federal Reserve has announced that it is establishing a Main Street Lending Program to support small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.
The $600 billion program is designed for businesses in need that are too big for programs like the Paycheck Protection Program but too small to access capital markets. Companies with less than 15,000 people or annual revenue of up to $5 billion are eligible for the loans. Funds will range from as little as $500,000 to as much as $100 million.
According to Federal Reserve Chairman Jerome Powell, the central bank is “days away” from making its first loans.