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6 Things You Need To Know If You Have A PPP Loan

If you were one of the businesses that received a PPP loan here are a few things you need to know about them.

1. PPP loans are forgivable if used for

-Payroll costs (health-care benefits, Employee’s salaries)

-Payments of interest on any mortgage obligations, Rent, Utilities, and Interest on any other debt obligations that were incurred before the relevant covered period

In order for payroll expenses to be forgiven they have to be

-Compensation (salary, wages, commission, or similar compensation, cash tips, etc.) not over $100K and not 1099 contractors

-Payment for leave (vacation, family, medical, and sick leave)

-Employee dismissal or separation costs

-Payment of employee retirement benefits

-Payment of state and local taxes imposed on the compensation of employees

But they DO NOT include

-Payroll taxes)

-Compensation of employees whose principal place of residence is outside the United States

-Qualified sick and family leave for which a credit is already allowed

3. If you used the PPP funding to pay for expense expenses listed above that would normally be a deductible tax write-off, they will NOT be tax deductible on 2020 taxes

4. 3 requirements have to be met in order to be forgiven

-Loan is exclusively used for their intended purposes

-Used to offset no more than eight weeks of eligible payroll expenses

-Businesses retain employees at salary levels comparable to before the crisis

5. If you received PPP loan you are NOT eligible for Employee Retention Credit

6. Accurately report the money spent in order for forgiveness

- Keep accurate records of how the money was spent preferably in a separate account and ensure you have proper documentation and support

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