The newest set of SBA FAQ’s covered borrowers who received both the PPP Loan as well as one of the initial EIDL Loan Advances. This has nothing whatsoever to do with the regular EIDL Loan. If you will remember, initially they were offering up to a $10,000 advance on the EIDL. Later they changed it to $1,000 per employee.
Whether you received the full $10,000 or $1,000 per employee, this was a grant rather than a loan. Because it was a grant, it does not need to be repaid. It isn’t a loan.
But it is not entirely free. Like any other grant, it must be picked up as other income and income tax will be assessed. This goes contrary to what a lot of people are saying about this grant.
They aren’t going to give you money, not ask you to repay it, and then tell you that you don’t have to pay income taxes on it as well. This isn’t Never Never Land. Unicorns aren’t jumping in the sky. It isn’t completely free.
Further, if you received an EIDL Grant as well as a PPP Loan, the amount of the grant will reduce your forgiveness on the PPP Loan. That’s why they are asking for the amount of any EIDL Grant received on the front page of the Form 3508 .
Let’s set up a couple of scenarios to illustrate how this works.
Client A received a $5,000 EIDL Grant and a $40,000 PPP Loan. No matter how the loan money was spent, the largest amount that Client A can possibly have forgiven is $35,000.
Client B received a $10,000 EIDL Grant at the very beginning of the program and only a $7,000 PPP Loan. Because the grant is larger than the loan, absolutely none of the loan money is forgivable.
I’m already hearing the moans and the groans. But let’s just remember that you didn’t have to work for this money.
Further information regarding these items can be found at the following web address.
https://home.treasury.gov/system/files/136/PPP–Loan-Forgiveness-FAQs.pdf
Let me leave you with this one thought…
As Congress returns from a month long recess, the warring political parties seem further apart than ever before. Leaders from both parties are using terms like “Impasse” and “Deadlock”. With the election only weeks away, this has denigrated into a childish game of name calling and finger pointing on both sides.
American businesses are in the middle of a crisis, and there is no aid or end in sight. It is now time for Entrepreneurs to do what we do best.
It’s now the time to lead.
We need to do whatever is necessary to get our businesses and our families through these difficult times. No one ever said that it would be easy. No one ever said that it would be fun.
But like it or not, that’s the job. Suck it up Marine. It doesn’t look like there is any help on the way. You need to have a plan. You need to execute it better than ever before.
And you need to realize that we are here to help.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there is anything that you need, whether you are a current client or not, we stand ready to serve. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
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773-267-7500
chris@accountingsolutionsltd.com
