In this week’s Wednesday episode (May 20, 2020) of the Town of Plymouth’s “COVID-19 Daily Update,” Heather Cozby reported that stimulus payments and unemployment payments are in full swing now. There are approximately 10 million stimulus payments that have not gone out yet, of which approximately 4 million will be sent out as pre-paid debit cards. You can access funds on those debit cards without fees, so you can cash it or move the money into a bank account. There is no reason given as to who will receive funds via check vs. debit card. The IRS is in the process of rehiring 3,500 employees to man the phones, so individuals can now talk to the IRS in person.

There has still been no movement on the Senate bill that would clarify how expenses related to a PPP loan will be treated for small business tax purposes (i.e., whether they will be able to be deducted).

The SBA issued their debt forgiveness application and instructions last Friday. It’s very detailed (11 pages total), but the SBA hasn’t yet put out FAQs to deal with potential issues. Go to the SBA website and print it out so you can read through it for further clarification. The “cover period” refers to the 8-week period you have to spend your money, starting when the funds hit your bank account. The SBA also offers an “alternative cover period,” which would be the first pay period after you receive your funds. This small adjustment can be significant for employers who had to furlough most of their employees and need time to rehire them.

The application also offers clarification on eligible non-payroll costs – items like rent, utilities, and mortgage payments – which can be up to 25% of the total amount of the loan and still qualify for forgiveness. The SBA clarifies that rent for real property would be rent for your office (real estate). Personal property is everything else, such as leases for copiers, equipment, computers, and cars, which would qualify as forgivable PPP expenses as long as the leases were in place prior to Feb. 15, 2020. Utilities encompass heat, electricity, gas, telephone, and internet. The application explains the paperwork that will be required to be assembled and submitted to your bank, which will then review it and submit it to SBA. The SBA has made it clear that they will be focusing primarily on businesses who took out a PPP loan of more than $2 million.

The American Institute for Certified Public Accountants (AICPA) recently issued a four-page document called “PPP Loan Forgiveness for Employers” which is a step-by-step process of how you need to document the expenses for doing your forgivesness application. It clearly explains what expenses qualify for forgiveness.

The SBA has started to send out emails regarding the Economic Injury Disaster Loans. Small businesses could apply for these advances of up to $10,000 early on during COVID-19. These emails provide actual loan documentation and approval, asking you to certify certain items. Businesses must decide whether they should take both the PPP and EID loans, or just one. Seasonal businesses may be carrying debt from the winter that they intended to pay off once they opened for the season. In those cases, the EID loans would be applicable to help with a trade payable (credit card or line or credit). You cannot use payroll expenses for both loan types.

Heather will be appearing on the show every Wednesday to give ongoing updates. Tune in next Wednesday at noon on the PAC-TV community channel and Plymouth government channel (Comcast 13 and 15, and Verizon 43 and 47), or online at PAC-TV’s streaming channel. You will have the opportunity to ask questions via email. The email address will be shown onscreen during the PAC-TV broadcast.