ILLMAS Posted June 13, 2020 Report Share Posted June 13, 2020 Yesterday I participated in a PPP webinar and here a couple of things I didn’t know of: 1. Many business will not qualify for the loan forgiveness even after the 24 month extension (presenters opinion) period, the why to follow. 2. Employees do not want to return back to work because they make more collecting unemployment. 3. New hires are on the same boat as # 2 or have better options 4. Employers are required to report any employee that refused to come back to work to the unemployment department (I have a couple clients with this problem). 5. Owner compensation has to be separated from the rest of the employees salaries. 6. Employers are allowed to give bonuses to reach the loan forgiveness threshold. 7. Full time employee calculation will be required. 8. Sch C owner who received a loan and are now collecting unemployment is now a no no. 8. Many clients that applied are going to have a hard time filing out form 3508 and schedules, to brush up on it to help your clients with the application. Quote Link to comment Share on other sites More sharing options...
Bart Posted June 13, 2020 Report Share Posted June 13, 2020 3 hours ago, ILLMAS said: Yesterday I participated in a PPP webinar and here a couple of things I didn’t know of: 1. Many business will not qualify for the loan forgiveness even after the 24 month extension (presenters opinion) period, the why to follow. That is a 24 week extension. 1 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted June 13, 2020 Author Report Share Posted June 13, 2020 10 minutes ago, Bart said: That is a 24 week extension. Yes, I made a mistake, thanks for the catching it. MAS Quote Link to comment Share on other sites More sharing options...
Lee B Posted June 13, 2020 Report Share Posted June 13, 2020 Be careful, the 24 week expanded expense window only applies to PPP Loans which were approved by the SBA after the PPP Flexibility Act was signed into law, according to additional Treasury/SBA guidance issued several days ago. Quote Link to comment Share on other sites More sharing options...
Edsel Posted June 14, 2020 Report Share Posted June 14, 2020 10 hours ago, ILLMAS said: 5. Owner compensation has to be separated from the rest of the employees salaries. Illegitimas, I'm wondering about this. Would this apply to corporations who are an entity to themselves? What about a sole proprietorship or an SMLLC where there is nobody but the owner? Quote Link to comment Share on other sites More sharing options...
Lion EA Posted June 14, 2020 Report Share Posted June 14, 2020 The term they use is owner-employees. Those appear in a different section of the forgiveness application -- which is due to be revised, so don't rush to turn one in just yet. Probably sole proprietors/ICs/SMLLC members and partners and shareholder/employees of S-corporations. Anybody know if shareholder/employees of C-corporations over a certain percentage of ownership fall into this category? (I don't have any C-corps this year.) Quote Link to comment Share on other sites More sharing options...
Lee B Posted June 15, 2020 Report Share Posted June 15, 2020 On 6/13/2020 at 2:37 PM, cbslee said: Be careful, the 24 week expanded expense window only applies to PPP Loans which were approved by the SBA after the PPP Flexibility Act was signed into law, according to additional Treasury/SBA guidance issued several days ago. Needed Clarification: PPP Loans approved after June 5th have the 24 week expanded expense window. PPP Loan approved before then have the option of choosing either the 8 week or the 24 week window. 2 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted June 15, 2020 Report Share Posted June 15, 2020 2,3,4. States will be very aggressive on this issue, so employers looking to rehire/hire can reasonable state the job offer and first work date will (eventually) likely be used as their end of UI date. Employers can also, depending on their personal feelings, make "soft" offers to feel out the person's intent. Employers, in states where the C19 UI claims will alter their UI rating/balance, will likely want to very aggressively protect their UI rating/balance. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted June 15, 2020 Report Share Posted June 15, 2020 On 6/13/2020 at 12:53 PM, ILLMAS said: Employees do not want to return back to work because they make more collecting unemployment To say that, without mentioning fear of getting sick or dying, or causing a family member to get sick or die, is leaving out the larger picture. 3 Quote Link to comment Share on other sites More sharing options...
JohnH Posted June 15, 2020 Report Share Posted June 15, 2020 I've seen several references her and in other places to "choosing the 8-week period OR the 24-week period." Just curious if anyone has a good explanation about why a PPP recipient woud elect to use the 8-week period. I can't think of a reason other than to "just get it over with". Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted June 15, 2020 Report Share Posted June 15, 2020 6 minutes ago, JohnH said: I've seen several references her and in other places to "choosing the 8-week period OR the 24-week period." Just curious if anyone has a good explanation about why a PPP recipient woud elect to use the 8-week period. I can't think of a reason other than to "just get it over with". To get the loan off the books in case it benefits the business operation. Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted June 15, 2020 Report Share Posted June 15, 2020 49 minutes ago, Abby Normal said: To say that, without mentioning fear of getting sick or dying, or causing a family member to get sick or die, is leaving out the larger picture. A person has the right not to work. Their action may have consequences, such as terminating eligibility for UI, and not making themselves eligible for FFCRA. Of the many requirements placed on employers, managing employee fear is not one of them. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted June 15, 2020 Report Share Posted June 15, 2020 20 minutes ago, Medlin Software said: To get the loan off the books in case it benefits the business operation. If the company is in the best shape for forgiveness after 8 weeks, they might want to just go for it. Especially if they might need to lay off employees later this year or cut hours &/or wages and risk having their potential forgiveness reduced using a 24 week window. Quote Link to comment Share on other sites More sharing options...
Lee B Posted June 15, 2020 Report Share Posted June 15, 2020 For me I don't want to be wrestling with PPP Loan Forgiveness Applications in December, January or February 2021. My largest client's PPP Loan 8 week window ended on June 11th. They meet all of the forgiveness hurdles except the FTE calculation, which currently leaves them with 95 % of their loan forgiven. I am currently trying project what the result of the February 15th/June 30th FTE Safe Harbor calculation might look like. I am also trying to evaluate whether we can tweak the Safe Harbor FTE calculation by making some work schedule adjustments to the last half of June. 1 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted June 16, 2020 Report Share Posted June 16, 2020 On 6/15/2020 at 1:00 PM, cbslee said: For me I don't want to be wrestling with PPP Loan Forgiveness Applications in December, January or February 2021. My largest client's PPP Loan 8 week window ended on June 11th. They meet all of the forgiveness hurdles except the FTE calculation, which currently leaves them with 95 % of their loan forgiven. I am currently trying project what the result of the February 15th/June 30th FTE Safe Harbor calculation might look like. I am also trying to evaluate whether we can tweak the Safe Harbor FTE calculation by making some work schedule adjustments to the last half of June. In am not terribly familiar with the FTE calculation, since it is not a concern for what I have to deal with. Maybe pesent a bill/quote for your participation using the 8 week, and an estimate of what it would cost if they decided to use the 24 week. The 5% extra forgiven may not be large enough to wait for, given what it might cost them for you to calculate FTE over the 24 weeks. ON the other hand, if the loan is 20k or more, the 5% is at least $1k, which you could get a piece of for your time, and still leave the employer with more forgiveness... Quote Link to comment Share on other sites More sharing options...
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