Update on CARES Act Loans & Tax Credits
Personal Tax Returns
As you are aware, the tax filing deadline has been extended to July 15th. At this time we are still processing returns and will be in contact with you upon completion. We thank you for your patience.
EIDL Loan Grant Changed
The SBA has changed the program. Maximum is now $1K per employee, not the flat $10K as promised in the CARES Act.  In addition, initial loan disbursements may be capped at $15K per applicant, rather than up to $2M that could have been given when approved. We are waiting for additional info from SBA. Emails are starting to go out from the SBA so be on the lookout. As of this point in time, we are hearing some clients are starting to receive these funds. We expect it will take at least a few weeks for everyone. Changes were made due to overwhelming demand for the Grants
Estimated Tax Payments
The IRS has now extended the deadline for BOTH 1st and 2nd Quarter Estimated Payments to July 15th.
PPP Money Loaned Thus Far
The SBA estimates they have loaned about $250B of the $325B allocated for the PPP loans. Congress is expected to eventually increase the funding by another $250B but is not scheduled to be back in session until April 20th. Last week's interim vote failed but it is possible they will vote again next week.
Employee Retention Tax Credit
You are not eligible for this if you use the PPP loan. To qualify, Collections must drop more than 50% compared to the same Quarter, 2019. Max credit is the lesser of 50% of an employee’s pay up to $5K for the year. In every case we’ve reviewed, the PPP money has the potential to save you more cash than this tax credit does.
File for PPP Now or Wait?
Our office is receiving a lot of questions from clients about when to apply for a Paycheck Protection Program Loan. We understand this is the most critical question every practice has at the moment.
Read through your options here.
How May I Use My PPP Loan?
If you accept the money now, I recommend waiting at least a week to spend it with the hopes we have SBA guidance by then. For forgiveness, only 25% may be spent on non-payroll expenses. Thus, be careful to save enough money to spend it on employee payroll & benefits. The SBA has not released specifics on spending terms but we will share the news with you as soon as we have it. We are working on a PPP expense tracker for you to use. This will allow you to enter approved expenses to show you how much of the loan can be forgiven based on current guidelines. Stay tuned for details to register for Friday's Webinar on PPP funding.
Stimulus Checks Sent!
Many people have received the stimulus checks which is $1,200 + $500 per child, up to $75K Single & $150K Married, with a phase out up to $99K Single; $198K Married. Sent via direct deposit if you use that for your tax returns when you file them.
Coleman, Ureda, Alford & Kaucher, PA