by Jean Miller | Accounting News, Bookkeeping, Business Consulting, COVID-19, News, Resources, Tax
Congress passed the Paycheck Protection Program Flexibility Act (PPPFA) on June 5, 2020, amending several provisions in the original PPP loan program. Along with granting business owners more flexibility and time to spend the PPP loan proceeds, the Act permits funds to be used on a wider-ranging variety of expenses while still allowing for loan forgiveness. Here is how this will affect businesses moving forward with a PPP loan.
Extended Covered Period
Originally, borrowers had 8 weeks from the receipt of loan proceeds to spend funds on forgivable expenditures. Now the covered period specifies 24 weeks after the origination of the loan, or December 31, 2020, whichever is sooner. To qualify for forgiveness, however, borrowers must maintain payroll levels for the full 24-week period. Borrowers do have the option to stick with the 8-week deadline, and they must likewise maintain payroll levels through the full 8 weeks to qualify for the full loan forgiveness amount.
Additional extensions include the timeline for eliminating reductions in workforce and wages, as well as restoring workforce levels and wages to pre-pandemic levels required for loan forgiveness (both extended to December 31, 2020).
Changes to Percentage of Payroll Costs
The PPPFA reduced the payroll expense requirement from 75% to 60%, which means that 40% of the PPP loan funds may now be put towards forgivable non-payroll expenses such as mortgage interest, rent, and utilities. Note that the expenses originally designated as forgivable have not changed.
Changes to Repayment Period
For borrowers whose loans are not forgiven, the PPPFA increases the repayment timeline from two years to five years. The 1% interest rate remains the same.
Changes to Rehiring Requirements
The PPPFA also extends the rehire date to December 31, 2020 and allows for a reduced headcount. Rather than basing loan forgiveness on a borrower’s ability to rehire the same number of employees on payroll as was used to calculate the loan, the PPPFA allows for loan forgiveness amount to be determined by documentation showing that the borrower was (1) not able to rehire former employees and unable to hire similarly qualified employees, or (2) not able to return to pre-pandemic levels of business activity in response to federal guidelines related to COVID-19.
Changes to Payroll Tax Deferment
The CARES Act originally prevented borrowers who received PPP loan funding from deferring additional payroll tax once the lender decided to forgive the loan, but the PPPFA eliminates this restriction, and borrowers can now defer the payroll tax for the period from March 27 to December 31, 2020.
Overall, the PPPFA will ease the burdens of businesses that received PPP loans, but it doesn’t fix everything or answer all the questions, so expect more regulations and changes to the PPP program in the near future.
by Pete McAllister | Accounting News, IRS, QuickBooks, Tax, Uncategorized
By Eric Zeman InformationWeek
July 25, 2011 05:20 PM
Intuit on Monday launched QuickBooks Mobile for Android smartphones. This new mobile software allows small and midsize businesses to more effectively control and manage their invoicing processes.
With QuickBooks installed on their Android smartphone, business owners can perform a wide range of actions right from their device without the need to find a PC. QuickBooks Mobile for Android can be used to create estimates, manage invoices, and view customer details. Further, the application syncs in the background with QuickBooks, which gives mobile professionals the most up-to-date information no matter where they happen to be.
Intuit says that QuickBooks Mobile was designed with SMBs in mind, as they often need as much flexibility as possible when it comes to performing work functions out of the office. With QuickBooks Mobile for Android, SMBs can stay connected to their business with quick access to customer and sales information, save time by checking customer balances and creating estimates on-the-go, and be more productive by invoicing at the job site without having to go back to the office.
“The majority of small and medium-sized business owners feel that staying connected through wireless devices is critical to the success of their business,” said Dan Wernikoff, vice president and general manager, in a statement. “As the demand for mobile access continues to accelerate, we’re working to give customers the solutions they need most so they can save time and make money wherever their business takes them.”
QuickBooks Mobile for Android is available for free to current QuickBooks Online subscribers. It also is available via subscription to QuickBooks Pro and Premier 2011 customers. QuickBooks Mobile is already available to Apple’s iPhone.
QuickBooks isn’t the first piece of software that Intuit has offered to the Android platform. In June, Intuit Financial Services introduced a mobile banking application that makes it easier for Android smartphone users to manage finances from their mobile devices. The application, which is targeted at consumers, lets users view account balances and transaction history, transfer funds, pay bills, and locate nearby ATMs and bank branches.
Intuit’s GoPayment, available to both the iPhone and Android platforms, allows SMBs to accept credit card payments anywhere, anytime. With it, Intuit offers a free card reader. Intuit charges a small fee per swipe, but there are no set-up or monthly fees, and no contracts.
One last SMB tool available for smartphones from Intuit is Online PayRoll. This application allows employers to pay employees with direct deposit or check, preview paychecks before approving, and view employee information and last payroll run report from their iPhone. Intuit hasn’t said if Online PayRoll will be made available to the Android platform.
With Monday’s release of QuickBooks Mobile, Intuit now has a whole suite of applications available to the SMB on Google’s Android platform.
At the 2011 InformationWeek 500 Conference, C-level executives from leading global companies will gather to discuss how their organizations are turbo-charging business execution and growth–how their accelerated enterprises manage cash more effectively, invest more wisely, delight customers more consistently, manage risk more profitably. The conference will feature a range of keynote, panel, and workshop sessions. St. Regis Monarch Beach, Calif., Sept. 11-13.
by Jean Miller | Accounting News, Uncategorized
Earlier this year Congress passed the Hiring Incentives to Restore Employment Act. (HIRE) One of the provisions of the act allows employers who hire a previously unemployed individual an exemption for matching social security tax on their wages. In order to qualify, the hire date must be after February 3, 2010 and before January 1, 2011; the individual must have been unemployed for the 60 day period ending on the date the employee begins employment with you; is not employed by you to replace another employee unless the other employee separated from employment voluntarily and the new employee can not be related to you. If you believe you have hired someone already this year that qualifies or you plan on hiring a qualified individual, they must complete form W-11. We have attached one for your convenience. If you have further questions regarding the act, please contact our office.
