Taxpayers should file by July 15 tax deadline but automatic extension to Oct. 15 are available

IRS will not postpone July 15 deadline

If you were hoping for an additional deadline…think again.

Cancel that summer road trip and get those extensions DONE!

If you missed it please be aware that  IRS announced late on Monday ( 6/29/20) that it will not further postpone federal tax filing and payment deadlines beyond July 15 (IR-2020-134).

In response to the hardships caused by the COVID-19 pandemic, most tax deadlines between April 1 and July 15 were moved to July 15 in Notice 2020-23.

https://www.irs.gov/newsroom/taxpayers-should-file-by-july-15-tax-deadline-automatic-extension-to-oct-15-available

The IRS reminded taxpayers in its announcement that they can apply for an automatic extension of time to file until Oct. 15 but must pay their taxes due by the July 15 deadline.

https://www.irs.gov/forms-pubs/extension-of-time-to-file-your-tax-return

Treasury Secretary Steven Mnuchin said the decision not to further postpone the deadlines came after consultation with various stakeholders.

Senate approves 5-week PPP extension until August 8, 2020

In case you missed it last night the U.S. Senate passed by unanimous consent a five-week extension of the Paycheck Protection Program (PPP) until August 8, 2020.

The SBA website should reflect this extension of time within the next several days after the House of Representatives passes the bill. President Trump is expected to sign the bill as soon as it reaches his desk.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-0

The bill will  provide more time for small businesses to apply for the approximately $129 billion in PPP funding remaining.

The  Paycheck Protection Program(PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses. Click here to read more about PPP loan forgiveness.  

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.

Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. View a list of lenders participating in the Paycheck Protection Program by state.

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
  • Loan payments will be deferred for six months.
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

The U.S. Small Business Administration (SBA), which oversees the program with the Treasury Department, stopped accepting loan applications at midnight Tuesday ( 6/30/20). The plan approved by the Senate would extend the application period until Aug. 8.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program

SBA updates its New EZ and Revised Full Forgiveness Applications…Check this out!

Here is a new idea to share with your small clients that might want to apply for the new EZ or revised Full Forgiveness loans.

Check out the two new SBA loan applications to see what you might need to do to qualify.…

https://content.sba.gov/sites/default/files/2020-06/PPP%20Forgiveness%20Application%203508EZ%20%28%20Revised%2006.16.2020%29.pdf?utm_medium=email&utm_source=govdelivery

https://content.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20%28Revised%206.16.2020%29.pdf?utm_medium=email&utm_source=govdelivery

 Remember the U.S. Small Business Administration, posted this week a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020. 

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:

  • Are self-employed and have no employees, OR
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees, OR
  • Experienced reductions in business activity because of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

The EZ application requires fewer calculations and less documentation for eligible borrowers.  Details regarding the applicability of these provisions are available in the instructions to the new EZ application form. 

Both applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. 

These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan. 

You may need the help of a professional CPA during this process so make sure you also check out the AICPA website on the subject for some additional ideas.

Here is a great article t from the Journal of Accountancy that will help walk you through the details.

“AICPA issues guidance on accounting for forgivable PPP loans https://www.journalofaccountancy.com/news/2020/jun/forgivable-ppp-loans-aicpa-accounting-guidance.html

Good Luck !!!