PPP Loan Update and Check-In
Dear Clients,

We hope you are continuing to stay safe and healthy. As many of you know, July, 15, 2020 was the first major tax deadline since the pandemic began. As the deadline has passed, we are now in the process of working on tax returns for the upcoming September 15, 2020, September 30, 2020 and October 15, 2020 due dates. If you have not already sent us your tax information, please send it in as soon as possible. We continue to work remotely. If you need any help sending us documents electronically, please reach out to the individuals you work with.

PPP Loan Updates and Other Items

We want to remind you about certain aspects related to the various stimulus programs enacted:

1.   PPP Loan Reminder - Final Loan Application Due Date August 8, 2020

There is still time to apply for a PPP Loan if you have not already received one. If you need to locate a lender please go the SBA website by clicking this link . You must apply by August 8, 2020.

2.     PPP Loan Forgiveness Application - Many of the PPP lenders have issued their PPP Loan forgiveness applications

Please follow your bank’s instructions for the required date to complete your application. If you need assistance with your application we are here to help. Here is a link to a tool provided by the American Institute of Certified Public Accountants (AICPA) that should be helpful as you prepare the information to be submitted to the SBA and your bank. Here is a link to an article about this platform that will help you complete the application process.

3.     FFCRA Reminder - Payroll Tax Credits

Employers can receive a payroll tax credit for sick leave and/or family leave paid to employees who are unable to work (including telework) due to any of six Coronavirus related conditions.

Eligible employers are entitled to immediately receive a credit in the full amount of the required sick leave and family leave, plus related health plan expenses and the employer's share of Medicare tax on the leave, for the period of April 1, 2020, through Dec. 31, 2020. The refundable credit is applied against certain employment taxes on wages paid to all employees.

Details on this payroll tax credit can be found in our 2020-10 newsletter .

4.     Deferral of Employer's Portion of FICA tax

The PPP Flexibility Act enacted on June 5, 2020 allows all employers to defer the employer's share of Social Security Tax that would otherwise be due during the period beginning March 27, 2020 and ending December 31, 2020. Employers that received a PPP loan are also entitled to this deferral, even if the loan is forgiven.

50% of the deferred amounts are due on December 31, 2021, with the remaining 50% due on December 31, 2022.

5.     Main Street Lending Program

The Main Street Program was established by the Federal Reserve to aid companies (including non-profit companies) that were in sound financial condition before the onset of the COVID-19 pandemic. Businesses can apply for the program through an eligible lender, which can be found here . The program offers 5-year loans, with floating rates, and principal payments deferred two years and interest payments deferred one year. The loans start at $250,000 to a maximum loan amount of $300 million. The loan amounts are calculated based on EBITDA (Earnings Before Interest Tax Depreciation, and Amortization). See the summary chart below provided by the Federal Reserve for a summary of the program and contact us with any questions regarding the program.
As always, we will keep you informed on all the important developments to the PPP as the SBA and the Treasury continue to release new rules and guidance. Please don't hesitate to contact one of us or reach out to our COVID-19 team at covid19@mggcpa.com should you have any questions. Take care and stay safe.

This newsletter is based on interpretation of the CARES Act and guidance released through July 26, 2020. There are areas of the Act where additional clarification from the Treasury and SBA is  needed. Your judgement and interpretations of the Act may be necessary. This alert is provided    for information purposes only and does not constitute accounting and tax advice. Please contact your MGGGY LLP accountant for additional assistance

CC mgggy newsletter release 2020-22
Mann Gelon Glodney Gumerove Yee LLP | (310) 277-3633