Three COVID Related Tax Updates
Currently, we are waiting for additional guidance on the Payroll Tax Deferral Program, Unemployment Insurance Benefits, and the PPP Loan Forgiveness Application. The way the payroll tax order was written, it only applies to the employee’s SSA portion of the FICA taxes, but additional definition is pending on several of these tax and PPP issues. As details emerge, we will keep you updated.
Payroll Tax Deferral
President Trump signed a memorandum to defer payroll taxes (only the employee’s share of social security taxes) paid from September 1 to December 31, 2020. We are waiting for implementation guidance from the Secretary of the Treasury. For more information, click here.
Unemployment Insurance Benefits
The memorandum also expanded unemployment insurance benefits, also known as “Lost Wages Assistance.” This program is expected to run from August 1 to December 6 but could end earlier based on when the $25 billion in available funds run out. Workers can receive $400 a week in supplemental unemployment insurance, which includes $100 paid by State matching funds. For additional information, click here.
PPP Loan Forgiveness Application
The Small Business Administration (SBA) has begun accepting forgiveness applications for Paycheck Protection Program (PPP) loans; however, your bank may not be accepting loans yet. While you may want to put the forgiveness application process behind you, here are four reasons to consider delaying your application submission.
More changes are on the way. Congress is currently considering changes to the Paycheck Protection Program (PPP) loan forgiveness application process as part of the proposed Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act.
Read through the new FAQ. The SBA and IRS recently published an FAQ document addressing questions and uncertainties about the PPP program and loan forgiveness. To read through the FAQ, click here or call us.
The forgiveness deadline is still months away. Forgiveness applications are due no later than ten months after the end of the loan’s covered period. Depending on when you received your PPP loan, your loan forgiveness deadline could range from February to August 2021.
Be thorough with documentation. Take the time to ensure you have all appropriate documentation before submitting your forgiveness application. Some documentation is not required to be filed but must be retained by the business. We can help you with your application.
Let Us Help
Our professionals remain up-to-date with these frequently changing government incentives and aid programs. If you are uncertain about or need further guidance, please call our office.