CARES Act Update
Update - Paycheck Protection Program (PPP)

This section summarizes updates made by the SBA to the Paycheck Protection Program (PPP). If you missed our first email about this program, here is a link to the email and here is a link to the SBA website discussing the PPP.

Interest Rate Change:

The interest rate has been modified from 0.5% to 1%.

Loan Application Finalized:

Here is PPP loan application link .

Payroll Costs Calculation:
Payroll costs are the sum of
1. Cash compensation for each employee capped at $100,000; 
2. Employer contributions to defined benefit or defined contribution pension plans;
3. Payment for group health care coverage including insurance premiums;
4. Payment of state and local taxes (ie: CA SUI and ETT)

Payroll made by Third-party payroll provider counts:
Borrowers who use Professional Employer Organizations (PEO) to process payroll and report payroll taxes would include the gross payroll amount in the Payroll Costs.

Time period the payroll costs count:
In general, borrowers can calculate their aggregate payroll costs using data either from the previous 12 months or from calendar year 2019.

Payroll Protection Program Loan Calculators:
The American Institute of Certified Public Accountants (AICPA) has provided three excel files that can help you calculate your eligible PPP loan.
Here are the links to the three excel file calculators:
This calculator will apply for most businesses that operated in 2019.
This calculator will apply for new businesses.
This calculator will apply for businesses that don’t operate year-round
These templates are based on interpretations of the CARES Act and U.S. Treasury guidance released March 31, 2020 and April 2, 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.  

List of Lenders:
See this link on the SBA Website to find your local SBA lender.

Application dates:

  • Small Business and Sole Proprietorship - began April 3, 2020
  • Independent Contractors and Self Employed Individuals - April 10, 2020

Currently you can apply for the Paycheck Protection Program loan through existing SBA Lenders. 

Additional Guidance:
The US Treasury and SBA have released additional information that can help guide you with your loan application. Here are two documents released by them:
  • Paycheck Protection Program Interim Final Rule issued on April 2, 2020. Please click on this link .

  • Treasury FAQs that is being updated daily. Please click on this link .
We will continue to update you with new guidance that becomes available.

Other miscellaneous SBA loan related information:

  • SBA will pay all principal, interest and fees on existing SBA loans for 6 months.

  • The amount of forgiveness from PPP loan will be reduced by $10,000 of EIDL grant advances should you choose to apply for both.

Update - Business & Individual Tax Relief

This section summarizes updates on the Business and Individual Tax Relief from the CARES Act. If you missed our first email about the CARES Act, here is a link to the email.

Update on Employee Retention Credit:
The credit is available to all employers regardless of size, however, this credit is not available to employers receiving an SBA PPP loan.
Update on Payroll Tax Deferral:
Deferral is not available to employers obtaining forgiveness of indebtedness under PPP loans.
Employers must post a notice about new leave/time off rights or notify work-from-home employees via email:
IRS Form released for Advanced Payment of Payroll Tax Credits Refund:
Form 7200 is used to request an advance payment of tax credits on the Form 941 series forms.
Economic Impact Payment:
Social Security recipients who are typically not required to file tax returns will automatically receive Economic Impact Payments via direct deposit into their bank account.
Other IRS's FAQ:

Here is a link to the IRS FAQ on the Filing and Payment deadlines:

We hope you and your family continued to stay safe and well. We are grateful that everyone at MGGGY is still able to connect with you during this unprecedented time. Please don't hesitate to let us know if you have any questions and concerns. We are here for you.

You can reach our COVID-19 team via email at COVID19@MGGCPA.COM

Mann Gelon Glodney Gumerove Yee LLP | (310) 277-3633