PPP Forgiveness Applications and Guidance

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On June 16, 2020, the Small Business Administration (“SBA”) released new documents pertaining to the forgiveness of the Paycheck Protection Program (“PPP”) loans.  The documents are (1) a revised PPP loan forgiveness application (Form 3508) and instructions and (2) a new “EZ” option (Form 3508EZ) and instructions for those borrowers that qualify.  

PPP Loan Forgiveness New Guidance

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The SBA released Paycheck Protection Program (PPP) loan forgiveness documents and instructions late on May 15, 2020.  The guidance is very comprehensive, particularly regarding the count of full-time equivalent (FTE) employees, and it specifies the documentation required to be submitted to lenders and what information borrowers must keep in the event of an SBA inquiry.

PPP Economic Need Update

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Good news for those Paycheck Protection Program (PPP) borrowers whose loan amount is under $2 million!  On May 13, 2020, the SBA posted an update to their Frequently Asked Questions document that states the following: “Any borrower that, together with its affiliates, received PPP loans with an original principal amount of less than $2 million will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”

BE-10 Foreign Entity Ownership Filing Deadline May 29!

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Every five years the U.S. Bureau of Economic Analysis (BEA) conducts a mandatory BE-10 Benchmark Survey of U.S. Direct Investment Abroad. The survey is used to produce statistics on the scale and effects of US-owned business activities abroad. The due date to file the survey is either May 29th, 2020 or June 30th, 2020 (depending on the number of forms required to be filed) but with approval from the BEA, the deadline in most situations can be extended until August 31, 2020. 

Employee Benefit Plan Deadlines Extended

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The IRS recently issued Notice 2020-23, expanding on previously issued guidance extending certain tax filing and payment deadlines in response to the novel coronavirus (COVID-19) crisis.  This guidance applies to specified filing obligations and other “specified actions” that would otherwise be due on or after April 1, 2020, and before July 15, 2020. It extends the due date for these specified actions to July 15, 2020.

New IRA, RMD and Estate Plan Rules

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Many individuals estates typically include IRAs. Be aware that two major laws were enacted into law recently, the Setting Every Community Up for Retirement Enhancement (SECURE) Act  passed on December 20, 2019, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed on March 27, 2020, have had a direct effect on IRAs. 

No Tax Deduction for Expenses Paid with Forgiven PPP Loan Funds

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In the CARES Act, Congress has allowed borrowers under the Paycheck Protection Program (PPP) to have some or all of their loan forgiven if they meet certain requirements.  See loan forgiveness details in our previous article, “PPP Economic Need and Loan Forgiveness”.  In Notice 2020-32, the IRS has provided that taxpayers are not permitted to deduct any payments made with funds from a PPP loan that have been forgiven.  While this is not a favorable result, keep in mind that PPP loans are not taxable income to borrowers.

PPP Economic Need and Loan Forgiveness

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The Department of the Treasury and SBA have been updating guidance on the Paycheck Protection Program (PPP) on almost a daily basis, and an update to a Frequently Asked Questions document on April 23, 2020, was quite alarming. Additional information appears to suggest that borrowers will be subject to future scrutiny about their eligibility for a PPP loan. 

CARES Act for College Students and Other Adult Dependents

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As many people eagerly wait for their CARES Act advance recovery rebate (stimulus checks), some people have been left out of receiving them. Anyone aged 17 and older who can be claimed as a dependent cannot receive one, and the people claiming them do not receive additional payments for them either.

Updates to Federal Tax Return Due Dates

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In Notice 2020-23, the IRS provided additional updates to the list of federal tax returns that have been extended due to the COVID-19 pandemic.  Please read this news post for more details regarding when the various forms are due.