· The one we all were waiting for! PPP expenses are now fully deductible. To the best of our understanding, there are no caveats and no thresholds.
· NOTE: NYS has been silent. Considering what they’ve done over the last few months, we wouldn’t be surprised if the PPP is fully taxable in NYS. Keep that in mind when tax planning. NYS rates are typically between 6 and 7%.
· If eligible, you can take a second loan in the amount of:
· Option 1 – take 2.5x average monthly payroll for the 12 month period prior to the loan application date
· Option 2 – take 2.5x average monthly payroll for calendar 2019 (which is what most people did for 1stDraw Loans)
· NOTE: For our restaurant and accommodation industry friends: you get 3.5x (anyone in NAICS Code 72: https://www.naics.com/six-digit-naics/?code=72)
· Must have under 300 employees
· Must have sustained a reduction in revenue
· For entities in business all of 2019
· 25% (not 30% as previously thought) reduction in revenue
· Compare any quarter in 2020 (if Q4 2020, have to wait to apply until after 1/1/2021) to the same quarter in 2019. Key is “or” – suggesting that it can beat the borrowers discretion
· For entities not in business during Q1 or Q2 of 2019
· 25% compared any quarter in 2020 to Q3 or Q4 2019
· For entities not in business during Q1-Q3 2019 (only Q4 2019)
· 25% compared any quarter in 2020 to Q4 2019
· For entities not in business during 2019, but were on 2/15/2020
· 25% reduction for Q2, Q3 or Q4 when compared to Q1 2020
· Simple certification process for loans up to $150k (just submit a 1-pager)
· Software and computing services to facilitate business operations, tracking of payroll, sales & billing – etc.
· Property damage – specifically if sustained during “public disturbances” in 2020
· Supplier costs – essential costs incurred to run your business
· Worker protection costs (think masks, plexiglass, drive up windows, etc.)
· If you calculated the amount wrong the first time, you should be able to increase your loan amount for the mistake (for example – if you left out owner compensation)
· 6 more months of principal and interest payments (subject to some restrictions and coordination with other clauses) – this is for businesses with 7A loans
· If payments are more than $9,000, the amounts may be added as interest to be paid at the end of the loan (by the borrower)
The full bill text can be found here: https://www.washingtonpost.com/wp-stat/graphics/BILLS-116HR133SA-RCP-116-68.pdf
The Hustle Firm will be hosting the Stay Strong Webinar Series on these topics this Wednesday at 1:30 p.m. Register Here.
RDG+Partners wants to be the primary advisor for motivated business owners. The firm is committed to providing boutique level accounting, tax and business consulting services to the Rochester, NY community.