Tony Nitti is a Senior Contributor for Forbes Magazine and is a leading voice for understanding the PPP Legislation and how we implement the program in our Small Business. The article below is an important read for all of us as we enter into the post-application phase of PPP. If you have not applied for or received a PPP loan please read for additional insight. If you have received your loan and have begun paying your employees under the Act, this article is particularly important for you. Instead of reprinting the entire article here, we are presenting the highlights of the article for you. If you find particular items of interest we encourage you to follow this link to the article as published on the Forbes website.
The headliner of the CARES Act was the creation of the Paycheck Protection Program (PPP), a new loan package designed to put $350 billion into the hands of small businesses for use in paying employee wages and other critical expenses over the coming weeks and months. As of the morning of April 15th, nearly $250 billion in cash had made its way to over one million small businesses, and Congress had already begun negotiations on a second round of PPP funding.
How is the CARES Act Intended to work?
- What does it mean when it says “costs incurred and payments made” within the 8-week covered period will be forgiven?
- How do the two “covered periods” interact?
- Are payments made with forgiven funds deductible?
- Can a business pay interest on non-mortgage debt during the covered period and have it forgiven?
- Can self-employed taxpayers have mortgage interest/rent/utilities forgiven, or can’t they?
- What are we doing about federal income tax withholding and payroll taxes?
- Can a business have self-rental payments forgiven?
- Can someone explain how we determine the required reduction in forgiveness amount if a business cuts employees?
- How does the reduction in forgiveness caused by salary reduction work?
- Who makes the call?
If you find yourself asking any of the ten questions above, we encourage you to take the time to read the article. As you know, there is still a lot of confusion and we believe that following individuals like Tony will empower all of us. We continue to monitor all ongoing and are here to help guide you through these times.