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4thought graphic - blog 2020

PPP Now Excluded from Gross Receipts Rule for Employee Retention Credit Eligibility

Posted by Lisa Haffer on Thu, Aug 19, 2021

For restaurants, one of the most beneficial COVID-19 tax relief measures made available by the U.S. government is the employee retention credit (ERC). For readers not familiar with the ERC, a general overview can be found in our January blog post.

The ERC is a fully refundable payroll tax credit equal to a percentage of wages paid by employers that meet certain ERC eligibility requirements. On August 4, 2021, the IRS confirmed its position that tips that are treated as wages for payroll tax reporting can be treated as wages eligible for the ERC in both 2020 and 2021 (provided all other requirements are met).  This is a significant win for the restaurant industry.

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Topics: Restaurants, 2020 Coronavirus

Warning: PPP Loan Forgiveness Deadline Approaching for Some Borrowers

Posted by Concannon Miller on Tue, Aug 17, 2021

Payroll Protection Plan loans were a lifeline for many small business owners during the worst of the pandemic-driven economic slowdown. In total, the Small Business Administration approved nearly 12 million PPP loans, averaging $67,000.

The PPP program stopped accepting loan applications on May 31, 2021. However, you still may need to complete the requisite forms to ensure that your loan will be forgiven. You can't afford to miss the deadlines for filing this paperwork.

The most urgent deadline is for companies that received PPP loans prior to June 5, 2020. Those generally were loans with a two-year maturity. (Loans made after that date have a five-year maturity.) Borrowers need to apply for loan forgiveness within 10 months of the last day of the "covered period."

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Topics: 2020 Coronavirus

SBA Opens PPP Direct Forgiveness Portal

Posted by Concannon Miller on Thu, Jul 29, 2021

The SBA is launching a streamlined application portal to allow borrowers with PPP loans of $150,000 or less to apply for forgiveness directly through the SBA.

Lenders are required to opt-in to this program through directforgiveness.sba.gov. So far, over 600 banks have opted in to direct forgiveness, enabling over 2.17 million borrowers to apply through the portal (accounting for 30% of loans $150,000 or less that have not yet been submitted for forgiveness.)

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Topics: 2020 Coronavirus

Restaurant Revitalization Fund to Start Disbursing $28.6 Billion in Stimulus Aid

Posted by Concannon Miller on Fri, Apr 30, 2021

Applications for $28.6 billion Restaurant Revitalization Fund will be accepted starting at noon Monday, May 3, the U.S. Small Business Administration has announced.

The grants are for restaurants with 20 or fewer locations to help cover their pandemic-related revenue losses in 2020.

Restaurants can start registering for accounts now. In preparation, the SBA recommends qualifying applicants familiarize themselves with the application process in advance to ensure a smooth and efficient application experience, specifically by:

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Topics: McDonald's management, Restaurants, 2020 Coronavirus

The Employee Retention Credit: The Improved Benefits for Businesses in 2021

Posted by Concannon Miller on Thu, Apr 22, 2021

The pandemic has adversely affected many sectors of the U.S. economy, causing widespread job losses. At the start of the national emergency, Congress created a novel tax break — the Employee Retention Credit — to entice employers to retain employees.

But three different laws have created and changed the credit, which has led to significant confusion. Here's a summary of how the ERC has evolved over the last year from the CARES Act to the American Rescue Plan Act.

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Topics: 2020 Coronavirus

PPP Loan Deadline Extended to Allow More Businesses to Get Funds

Posted by Concannon Miller on Mon, Mar 29, 2021

The application deadline for Paycheck Protection Program (PPP) loans has been extended two months from March 31 to May 31.

The extension will allow more businesses to apply for the funds and also allow more time for the U.S. Small Business Administration to process more applications. Congress approved the extension last week; it currently awaits President Biden’s signature.

More than two million PPP applications have been held up by error codes and approximately 190,000 applications remain unapproved, according to the American Institute of CPAs. The extension gives the SBA until June 30 to process PPP loans.

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Topics: 2020 Coronavirus

Third Stimulus Extends Popular Business Tax Credit, Provides Restaurant Funding

Posted by Concannon Miller on Wed, Mar 10, 2021

Congress has passed a third COVID-19 pandemic related stimulus bill, providing extended and renewed business funding and tax benefits.

The biggest business benefit is likely the extension of the popular Employee Retention Tax Credit. The third stimulus bill, formally known as the American Rescue Plan, extends the credit through the end of 2021.

The $1.9 trillion bill also includes $28.6 billion in relief for the restaurant industry, limited to restaurant groups with 20 or fewer locations.

Among the most significant individual benefits are a third round of direct stimulus payments and expanded unemployment benefits and child-related tax credits. Read on to learn about the most significant business and individual benefits.

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Topics: 2020 Coronavirus

New PPP Loan Rules Announced to Help Small Businesses

Posted by Concannon Miller on Tue, Feb 23, 2021

The federal government has announced new rules for Paycheck Protection Program loans intended to help more small businesses obtain them.

Starting Wednesday, only businesses with 20 or fewer employees can apply for PPP loans during a two-week period. The 14-day exclusive application period will allow lenders to focus on serving small businesses, President Biden’s administration announced.

The administration also announced plans to assist sole proprietors, independent contractors, and self-employed individuals receive more financial support. Many were structurally excluded from the PPP or were approved for as little as $1 because of how PPP loans are calculated.

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Topics: 2020 Coronavirus

PA Provides PPP Tax Relief, COVID Business Grants

Posted by Concannon Miller on Mon, Feb 8, 2021

Pennsylvania has approved legislation clarifying tax rules on PPP loans and also providing $912 million in COVID relief aid.

The legislation, approved Friday, clarifies that Paycheck Protection Program loans that are forgiven are not taxable in Pennsylvania and that businesses may deduct eligible expenses paid with PPP loan proceeds. This aligns Pennsylvania’s PPP rules with federal rules approved in December and is very beneficial to businesses and individuals with PPP loans.

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Topics: Business tax planning, 2020 Coronavirus

Many More Businesses Now Eligible for COVID Employee Retention Tax Credits

Posted by Angel Chiariello on Wed, Jan 13, 2021

The Employee Retention Tax Credit (ERTC) provision of the 2020 CARES Act was overshadowed by the PPP loan program, primarily because the original ERTC provisions prohibited an employer with a PPP loan from claiming ERTCs.

The 2021 Consolidated Appropriations Act, passed just weeks ago and most known for allowing businesses a tax deduction for the expenses paid with tax-free PPP funds, made sweeping changes to the ERTC rules as well. Most notably, lawmakers removed the provision disallowing businesses with PPP loans to participate in the ERTC program.

As a result, these valuable credits are now available to more business owners for wages paid in Q1 & Q2, 2021 (and possibly for wages paid in 2020). For more information about the original provisions of this program, see our article here.

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Topics: Business tax planning, 2020 Coronavirus

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