Many businesses that have already received a PPP Loan are choosing to not get them forgiven. Instead they are choosing to use the payroll that would have been used for that forgiveness to claim the ERC as well.
There is a sort of twisted logic on this so follow me.
If an entity is an extremely cash strapped business, they may choose to use the same payroll for both. In order to do that, they cannot get the PPP Loan forgiven and would need to repay it at the stated interest rate of 1%. Let’s use an example.
We have a company that has $10,000 in monthly payroll. They apply for and receive a PPP Loan on January 15th for 2.5 times their payroll or $25,000. Normally, because they would need the payroll from January 15, 2021 through the end of March to claim forgiveness on the PPP Loan, they wouldn’t file for the Employee Retention Credit in the first quarter of 2021.
Because the business needs to handle it’s cash concerns, they choose to do both during the same period. The file for the ERC in the 1st Quarter. At 70% of their payroll that’s another $21,000 that they receive in the period bringing the total received from the two sources in the first quarter to $46,000.
For some it isn’t a bad choice as long as they’re willing to repay the PPP. It is, after all, a 1% loan. Financing like this is hard if not impossible to find.
Let me leave you with this.
That’s right, my Brothers and Sisters. You heard it here last. The City of Chicago has officially changed the name of the Outer Drive to Jean Baptiste Point DuSable Lake Shore Drive.
I can’t wait to hear my Google maps the next time I’m going downtown spit out something like, “Please turn right onto Route 41 – Jean Baptiste Point Lake Shore Drive.” By the time it’s done spitting out that tongue twister, I’ll probably be off of the drive anyway.
When does this nonsense stop?
Chicago is becoming unrecognizable. They’re changing the names of all of our schools, tearing down monuments, and even changing the name of our most recognizable drive.
Our city council is doing what they do best, nothing. What will this or any of the other changes do to get to the heart of any of the problems they are trying to solve?
The changes are only symbolic.
Symbols are important. I’m not going to act like they aren’t. But what is changing a name going to do to help an impoverished kid without a father, get out of his circumstances? I was one of those kids. I can tell you that it certainly wouldn’t have done anything for me.
What’s next? Mayor Lori Lightfoot Magnificent Mile Michigan Avenue?
Please get me a bucket. I need to hurl.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything you need, whether you are a current client or not, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
www.AccountingSolutionsLtd.com
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