Medlin Software, Dennis

Tom, I believe the interest rate has landed on 1%. I believe the interest and principal are deferred for 6 months, and the loan term is 2 years. Anything else, I will believe it when it happens. I do not have the exact scenario, but I have pondered those same items. I cannot with a straight face tell anyone to rely on forgiveness, although it may happen. I have not seen a way to ask for any amount other than the calculated amount. We may hear more as loans are actually accepted and funded. For a concern that will likely survive, I would apply for the max, and when approached to fund, hope the forgiveness process is known (although as we have just seen with the EIDL, everything is subject to change). If allowed to take less than the max, and that is what the business is more comfortable with, then do so. Deposit into a new bank account. Hopefully, before the 8 weeks is up, the forgiveness aspect will be rock solid, so decisions can be made. Until the forgiveness is known, I would not spend "extra" based on the forgiveness. Dennis

Likely, the govt web sites are managed by employees who work for an IT type department. To have changes made, it takes paperwork to ask, the work to get done and tested, the asking department to test and approve, then the changes go live. Union employees, even in these times, are not likely allowed any shortcuts.

I saw that last night and about choked. It was not the option for me, and may not have been the most beneficial, but it was supposed to have been the fastest, so some "gave up" more beneficial options to use EIDL. Already had someone asking if I think they can refuse or cancel their EIDL so they could try to apply for PPP, or to wait for retention credit.

The first of me being the bad guy has occurred. "What do you mean I cannot use the retention credit and get a forgiven PPP? I am grateful they asked first. I "Carnac" many will get into trouble later, such as getting a PPP, going through forgiveness, then having issues when caught trying to also claim the retention credit.

And make it a legal "granny" unit if possible, so it could be rented out for that purpose too if ever desired, or upon property sale...

Sounds like you are asking about the employee retention credit. Look at the new IRS Form 7200 form and instructions. This is arguably the easiest (no bank involvement!), but not always the most beneficial.

Understand. Same as the business PPP loans, part of the process to determine which plan is most beneficial is knowing all the details. For PPP, the forgiveness app and rules have not been detailed, and we have seen where the details may not match the law text exactly, so relying on the law text is shaky. I have known a fair number of hair care people over my time. They have all been good people, and many have become friends, I would not want to place money on believing all money hit their tax return and bank account, and that all expenses were business. Thankfully I never have been in a position to talk about their tax returns or compliance. Morally, I do struggle with whether or not to tip using a card (which will be taxed given the current CC processor 1099 rules) versus cash, which I know might not get completely reported. Finally, my wife told me what others do with their finances, if I am not involved, is none of my business, so if we happen to or want to tip in cash, don't add it to my worries in life.

While I have no dealings with this item, I have been asked for advice. The one which will "tip" some is unreported tips. There are many SE types who depend on tips, and not all tips may fall onto their tax return, or into their bank account. Those who keep real books and document all income and expenses should be able to come up with whatever is required. The PITA willbe clients who ask for help to prove income which magically appears for this new process.

Those who can exert control over the timing and amount of their income (such as S Corp owner/employees) have always had some advantages if they put in the work to discover and use them.

A death during 2020, that person should still be eligible, as far as I have seen. TP passed on Pi day intestate. Admin will not be appointed before the stimulus hits the still open bank account. Assuming the 2020 return is filed on behalf of the TP, not the estate, the credit should apply. Of course, the law text is subject to interpretation, and at least in other areas of the recent items, there has been license given to go with the intent of Congress, not the words they passed.

Must compare all possibilities to know which is most beneficial. PPP, somewhere between 8 and 20k eligible (the higher is if they can include health care costs), which likely the 2x factor is eligible for forgiveness, and likely the entire amount. The other loan offers more cash (I am too blurry to remember if it had a small grant component) now. There is also the possibility of one spouse being eligible for FFCRA leave, or possibly, the 50% credit if their income drops the required amount for any quarter (max $10k benefit for two employees). Then you have to chart if the business can have more than one, which can work together, and which preclude one or more of the others. The key is having any accurate ability to project income for the remainder of the year (in addition to good payroll records at your desk).

An interesting aspect, saw one source suggesting it is acceptable to add employees from the application count compared to the forgiveness count. I have seen no prohibition from having your forgiveness payroll being higher than the loan calculation monthly amount. It does make sense to be wary of doing so in a plain attempt to pad the forgiveness. But, such as might be the case for me, I need temporary help now (after the Feb 15 :count" date), to allow me time to do more programming to handle the FFRCA implications in payroll. Some might even have a higher payroll for the same employees, if they are doing extra work, such as cleaning after their usual hours. Once the forgiveness application documents come out, then more will be known. Someone did list things to not do, such as fictitious hiring of all types. Even if able, I would not suggest shifting income into those 8 weeks either. A nice pattern of regular pay per employee at a stable number of hours will likely prevent any unneeded questioning / audit during forgiveness application. Not all employers will be able to "use" all of the possible forgiveness (roughly, the extra .5 in the multiplier) in allowable expenses, especially home based folks who likely pay no rent. So for those who cannot project enough expenses to use the extra loan amount, they should keep good records and be ready to pay back or carry the amount of their loan which is not eligible for forgiveness.

Unless something unexpected pops up, they would be eligible based on their averages allowable payroll costs based on the H&W (the employees). The contractors are on their own. My bank was easy to apply online, once they told me to (they had a virtual queue). (Helps that I do my own payroll...) The SBA form, with about 4 or five bits of extra (to likely help with the calculation), and controlling interest people information. Had to submit 941 forms and a payroll summary as of Feb 15. I "added" a sheet showing how I calculated the amount I entered since their instructions did not mention, or even ask for allowable health insurance costs, and since they are not shown on a 941. Best to apply with a bank you have an account with, as the bank is allowed to process their own customers first. The one delay was the online service they used for the document was a bit slow at first. I suspect it was because they were trying to verify the signing person;s identity through a credit bureau type system. I think when mine went through, they disabled the identity verification online, and will likely identify me via my account records.

WA State has employer and employee pay WC (they call it L & I) only on actual hours worked, so emergency sick pay will not affect their L&I calculations. I should have remembered. WA is a growing outlier, as their state PTO does not believe tips are wages (they copied their UI definition of wages) so tipped employees get the dirty end of the stick. Call me mush brain for the next week or two

Deep diving into this. DOL is using "intent of Congress" to smooth over some of the bumpy parts in the law text. My eyes are blurry... so I may be slightly off on some of the things not directly affecting me! Hopeful the good faith provision prevents anal type auditing. For instance, calculating the pay rate allowed for reimbursement accurately can be a chore, and I suspect many will pay based on the current pay rate, which could be more than allowed for reimbursement. I don't have the cite handy, but I saw something where the intent rule is allowing employers not to restrict the credit to their SS match amounts, they can retain FWH if needed to "cover" the emergency leave. I have seen at least one state which affirms sick leave, even this emergency leave, is subject to WC premiums. States tend to use the same remuneration rules for WC, or I have not yet seen a state have something drastically different from the others. The reimbursement must be added to business gross income to avoid the dreaded double dip. Employers do not have to allow start and stop. They can restrict it to once started, it cannot be restarted . Plenty who grasped this incorrectly. This is not retroactive. Did not start until Apr 1, 2020, so there are likely few, if any, who need to pay it out or file a 7200 before at least Monday. I have several customers who closed before Apr 1, but think they have to pay this because the employee's school is also closed. One has a part time employee who is still working, but is asking for the free leave extra money because their child's school is closed. The DOL is likely the best current official one stop source. Their Q&A is lengthy, but every employer should read it. https://www.dol.gov/agencies/whd/pandemic

Not considering straight loans, only looking at items with reimbursement/forgiveness. Straight loans are fairly straight forward, with the understand forgiveness may not be part of the process. It is complicated, especially since there could be several options for a particular business. The "credit" items, such as via Form 7200, are likely the easiest. The PPP SBA loan, and potential forgiveness, may be the more lucrative. Taking the retention credit on the 7200 means you are not eligible for forgiveness on a PPP loan. Forther complicating is 7200 is also used for partial compensation for fronting the emergency PTO. (I did see something that excluded WC costs from this compensation, which makes the ePTO very expensive for high WC premium businesses, and the business owner may not realize the ramifications until their WC bill comes biting.) The retention credit maxes at $5k per employee. If the business can get through the crisis and can hire most, all, or more FTE equivalent employees by the end of June, PPP loans with possible forgiveness are likely the most lucrative. Forgiveness covers 8 weeks of "payroll costs" and some other allowable expenses including group health care costs, up to the loan amount. Personally, I am advising some friends, but have too many customers who advise individually. Thus my post in the other forum offering to refer to those who are seeking possible referrals for such advice, which would work into tax gigs. I am hoping most people can get advice from their tax preparer, as that is the person who likely already has the needed numbers, assuming the business owner does not want to handle on their own. Of past note, Lay offs were a very viable option for certain businesses, as it limited exposure to ePTO costs (unreimbursed such as increased WC, and time spent processing), and provided something for their employees (UI, plus the extra 600 weekly UI add on, and the ability to apply for free medical). If those who were forced to or choose to lay off can rehire in time, then the PPP loan remains viable. The one caveat on the PPP loan is if there are employees earning over 100k, as the amount over 100k must be excluded. I have seen at least one firm (online) which is offering to handle the PPP process front and back end, for a fee. This may be a viable option for some to use. The bank handling the PPP loan gets a percentage of the loan as a fee. "Agents" who help with the loan process can also receive a fee. I am not really digging any deeper, since I found the best course for my situation already...

Among my customers, I anticipate at least a few will be asking for assistance in determining which plan or plans (such as PPP) will be the most beneficial. I am not in position to go through each customer's situation and offer suggestions. However, if there are any here who would be interested in being offered to my customers as a referral, you can send an email to my work email (medlin at medlin dot com) and I will add you to a list I send when asked. Include your preferred method of contact. I have seen several online who are offering application assistance and advice (one has a $1k retainer for PPP app, with a separate arrangement/fee for the forgiveness app). I have no idea if my customers want to go that far, as most are capable of handling applications and forms, but they may need help running scenarios/numbers to see which processes will be most beneficial. Dennis

Absolutely, Payroll Protection Program. No requirement to have laid anyone off, or had sales drop by application date. Affirmation is vague enough anyone can affirm. Just sign up after me

For me, I can be certain of my numbers, so it was easy to see the PPP process is most beneficial for me. For others, maybe it is the retention credit or something else.

IRS Form 7200 and instructions are ion their draft page...

Maybe, I have not researched it recently, but then again, I don't exclude it from WC wages in any state in my software (it is broken out though). For the high WC codes, say over $10 per 100 (10%), this could be a real unexpected bite for some employers.

What I am curious to see/find is how WC calculations are affected. WC wages currently include PTO. If some sort of exception is not in place or created (the emergency PTO excluded from "wages" for WC purposes, or the PTO is not really PTO) then this is something many business will have to consider, those with high WC rates.

"He doesn't make that much money" That you know of. I would not be concerned with that aspect. I watched a hair care person on the news last night, complain about the CARES Act not helping self employed enough. What I "heard" in my head was the CARES Act was not compensating for unreported tips well enough. If you want to rid them, then 10% over the local over charge, as long as you are happy to take the work if they want to stay at their new rate. Could add a JD type structure, billing for all time, against retainer, and when they see the time you really spend, they will clean up, or you will enjoy being paid 15min to leave a phone message.

Or raise their price by some multiple (complication from new laws is always a good generic reason), enough to make you comfortable with their business, then let them decide. I used to be the "fire 'um" type until I took to heart advice from others about there always being a price which I can tolerate something, and sometimes, more PITA customers are more profitable in less time than more average customers.. I have current customers who are not allowed to ask questions (as they abused the offered support). I have some who the software is locked to a specific computer (as they were installing on computers of others, and taking money from others). Some I only accept money orders, with an extra fee added on, as they play the "chargeback" game when they pay by charge card. The second example was the tougher to swallow. Those folks were actual thieves, but I found a way to keep taking their money while preventing their theft. Many years back, some folks figured out how to crack my registration scheme. When I resolved it, I gained customers from those who were stealing, so even theft can bring in customers... I know what they were doing, they know, but I found a way not to have to ask, and yet turn them into revenue.

The college may have someone you can get in touch with. Likely full time, but if you want comfort, a print out of their unit fee and full time unit count could be enough.