New Form PF Requirement & Need For ‘Institutional Readiness’
New Form PF Requirement Underlines The Need For ‘Institu
Congress has passed its spending bill, the “Consolidated Appropriations Act (CAA), 2021” on December 21, 2020 which includes Additional Coronavirus Response and Relief (ACRR). The President Trump has signaled he will sign the bill. ACRR includes a provision that provides $284 billion for paycheck protection program second draw loans.
Eligibility Criteria for Second Draw PPP Loans
Prior PPP borrowers must meet the following conditions to be eligible for the second draw loans
Eligible Entities
Eligible entities include for-profit businesses, certain non-profit organizations, housing cooperatives, veterans’ organizations, tribal businesses, self-employed individuals, sole proprietors, independent contractors, and small agricultural co-operatives. Specifically excluded are public companies, lobbying entities, entities with China-based ownership and venue operators receiving aid under the venue grant section of the Act.
PPP Loan Criteria and Improvements
The maximum loan amount an eligible entity can receive is the lesser of $2 million- or 2.5-times monthly payroll costs incurred during the one-year period before the loan is made, or during calendar year 2019 (3.5 times monthly payroll if the entity’s NAICS code is 72: Accommodation and food Services). ACRR maintains the 60% payroll (40% non-payroll) expense requirement of the PPP Flexibility Act.
ACRR also makes the following improvements that can be retroactively applied to all PPP loans:
Application of exemption based on employee availability.
ACRR extends current safe harbors on restoring full-time employees and salaries and wages. Specifically, applies the rule of reducing loan forgiveness for the borrower reducing the number of employees retained and reducing employees’ salaries in excess of 25%.
CAA also modifies or extends other individual and business-friendly provisions, including the employee retention tax credit, business meal deductions, retirement plan distribution relief and more.
New Form PF Requirement Underlines The Need For ‘Institu
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