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April 30, 2020

Maximizing Your PPP: How Companies Should Plan to Get the Most Out of Their PPP Loan (On-Demand Webinar)

Small businesses, sole proprietors, and independent contractors across the country have spent the last few weeks desperately hoping to be one of the recipients to benefit from the Paycheck Protection Program. Now that 1,661,367 loan recipients (and counting) have been approved for a loan, SC&H Group hosted a webinar on Thursday, April 30th to help answer “now what?” for those businesses. The recording is available below.

Here’s a breakdown of what we covered:

  • How businesses should prepare to document their need for the loan
  • Guidance on how to best use the money
  • Tips for understanding and applying the forgiveness terms of your respective loans
  • Interplay between PPP and other COVID-19 federal relief provisions

It is important to note that this information is very fluid. The content and advice we are presenting in the video is our interpretation of what is available at the moment – and all businesses need to continue working closely with their bank, attorney, and accountants.

 

Alert: There was important guidance released since our webinar: In a notice released on April 29, the IRS has ruled that while PPP loan forgiveness is tax free under the CARES Act, the related expenses are not deductible. We had discussed the possibility of IRC 265 being referenced to deny those deductions in our webinar on April 30.

IRS Notice 2020-32 clarifies that no deduction is allowed for an expense that is otherwise deductible if the payment of the expense results in forgiveness of a PPP loan amount and the income associated with the forgiveness is excluded from gross income under the CARES Act.

For self-employed individuals, the owner compensation equivalent amount that was utilized to develop their loan forgiveness amount was previously not deductible, so this notice will still allow those taxpayers to receive tax free loan forgiveness on that aspect of their loans.

It’s important to note that there is talk of Congress acting to nullify the IRS ruling here, and we haven’t heard from the IRS specifically on how they will treat PPP loan forgiveness for self-employed taxpayers. Right now, the entire situation is fluid and merits additional monitoring.

For a downloadable version of the presentation slides, please visit this link.

To listen to this presentation in podcast form:

We’ll continue to keep an eye on new information and add new content as it becomes available. In the meantime, if you have any questions for the SC&H Group Team, please reach out to us directly through our website.

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