Let’s begin by saying the White House just confirmed that PPP Loan applications will open beginning on Monday morning. There will be an ordering process on all applications. Only first-time applicants will be allowed to apply on Monday. Second draw applications will be allowed beginning Wednesday.
Some of the portals seem to be opening up telling people that they can be first in line, so the mad gold rush has again begun.
In many ways, the biggest change on the PPP2 Legislation was the Employer Retention Credit. Please remember that all of this is subject to change. We are still waiting for the final rulings from the SBA and IRS. As it sets, here are the highlights.
PPP Loan Borrowers Can Now Receive The ERC
Prior to this bill, these two items were mutually exclusive. Now, PPP borrowers can also receive an ERC retroactive to March 13, 2020. The difficulty comes in the use of the funds. An employer cannot double benefit from both. In other words, an ERC cannot be claimed on payroll that is used for forgiveness on a PPP Loan.
Employers Can Claim Previously Unclaimed ERC’s
Employers may catch up on unclaimed Employer Retention Credits by claiming the credit on the 4th Quarter of 2020 or by amending prior quarters of 2020.
PPP2 Lowers The Eligibility Threshold from a 50% Decline to 20%
In order to be eligible for the credit, in 2020, an entity needs to be able to prove that it’s receipts were down 50% from the same calendar quarter in 2019. In 2021 that eligibility reduces to a 20% decline. Currently the expanded ERC is only available for the first two quarters of 2021.
Expansion of the Credit
The legislation expands the credit in the first two quarters of 2021 to 70% from 50%. It also changes the cap on qualified wages from $10,000 per year to $10,000 per quarter. This means that instead of getting $5,000 per employee per year, you can potentially get $7,000 per employee for the first two quarters of 2021.
I need all of you thinking about these changes before we decide what to do on the fourth quarter of 2020 payroll tax returns.
Let me leave you with this.
I believe it’s time for all of us to remember the America of our youth.
I don’t know how you were raised, but I can tell you that I was taught that if I disagreed with you, it didn’t make you my enemy. It made you a brother or a sister where conversation was necessary.
When I was a boy, we had actual enemies. Viet Nam was still being fought. Our youngest and bravest either weren’t coming home at all, or were returning with partial bodies or broken minds. Dozens of nuclear bombs were still pointed at Chicago. There was still an underground missile silo on the piece of ground in front of Belmont Harbor.
We used to do nuclear drills at my grammar school. The firemen would come and sound a special alarm. All of us would run to the basement and sit in rows on the floor. Only God knows how that was supposed to save us in the event of a nuclear holocaust, but fear was an every present companion. Now that there is no one left to fight, we fight ourselves.
In the immortal words of Rodney King, “Can’t we all just get along?”
At the end of the day, when are we going to realize that only have each other. We’re all just Americans trying to raise our families and operate our businesses in an ever-changing and difficult world.
Before you start pointing fingers saying that this person or that political party is at fault, please realize that whenever you point one finger, three of your own fingers point right back at you. When you point a finger, you divide us, and then you become part of the problem.
Rise above the small and petty differences of your brothers and sisters, embracing them as the Americans they are. Stop the divisions, doing something that’s actually good for our great land of liberty. We’re all supposed to be grown. Why can’t we act like adults?
Make your little part of America the best that it can possibly be. In other words, lead.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. If there’s ever anything we can do for you, whether you are a current client or not, you have but to ask. I’m here and I remain,
Accounting Solutions Ltd.
CONFIDENTIALITY NOTICE AND LEGAL DISCLAIMER. The information contained in this email message, including any attachments, is legally privileged and confidential and intended only for the addressee(s). If you are not the intended recipient, you are hereby notified that any reading, use, or dissemination of this message is strictly prohibited. If you have received this message in error, please notify us immediately and delete this message from your system.
Although this email and any attachments are believed to be free of any virus or other defect which may affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure it is virus free. Accounting Solutions Ltd. accepts no responsibility for any loss or damage arising from receipt and use of this email.
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.