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  • 02/09/2021 8:59 AM | Anonymous member (Administrator)

    January 29, 2021

    Hosted by Neil Amato

    Paycheck Protection Program (PPP) loans and the start of tax season are two topics squarely on the minds of CPAs these days. This episode analyzes the Jan. 25 update by the U.S. Small Business Administration (SBA) about processing second-draw loan applications and looks at what recent IRS announcements mean for tax season. Kari Hipsak, CPA, CGMA, a senior manager at the Association of International Certified Professional Accountants, and Alistair Nevius, J.D., the JofA’s editor-in-chief, tax, are the guests for this quick look at recent news that affects the accounting profession.

    What you’ll learn from this episode:

    • Why PPP loan applicants should be patient and vigilant.
    • The practical applications of the SBA’s recent update.
    • A preview of the JofA’s February print issue.
    • What the announced date that the IRS begins accepting tax returns means for practitioners and filers.
    • Effects of the Consolidated Appropriations Act, 2021 (CAA), P.L. 116-260, on tax season.

    Play the episode below:


    Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

    To comment on this episode or to suggest an idea for another episode, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.

  • 02/04/2021 9:25 AM | Anonymous member (Administrator)

    February 4, 2021

    By Jeff Drew

    The AICPA sent a letter Wednesday urging the US Small Business Administration (SBA) to address problems small businesses are encountering when trying to apply for Paycheck Protection Program (PPP) forgivable loans.

    The letter, which is signed by AICPA President and CEO Barry Melancon, CPA, CGMA, refers to “a number of very significant operational changes to the PPP by the SBA which are not fully understood, as well as some process and system issues which need to be addressed in order to effectively provide critical relief to eligible organizations.”

    Some of the issues could be addressed by more communication from Treasury and the SBA, which oversee the PPP, the letter said. Other items will require SBA system and process improvements related to the E-Tran and PPP Loan Processing system, according to the letter.

    The letter addresses four areas of concern, as follows.

    Challenges with first- and second-draw PPP applications being denied acceptance in the SBA’s E-Tran system

    Additional validation checks put in place to counter potential fraudulent applicants are causing tens of thousands of legitimate applications to be denied acceptance by the SBA, the AICPA letter said, adding that “Lenders and loan applicants do not understand the process to resolve these declines, creating great anxiety and confusion for small business owners.”

    The letter describes some system/software issues that are causing declined applications, giving the example of many instances in which the small business owner is being incorrectly informed that they have a criminal record. Even after redoing this certification, borrowers may then still be declined on the same application due to another incorrect validation rule (for instance, an Applicant Tax ID issue).

    The AICPA requests that the SBA provide more information on the validation process and correct some of these system issues as an urgent priority. In addition, to reduce anxiety and confusion, small businesses would benefit greatly by being more clearly informed that their initial acceptance in the SBA E-Tran system could take more than a week via broad communications about the program. Because these validation checks are new, many applicants do not understand the potential change in the timeline for funding, particularly if their application encounters processing errors, the letter said.

    SBA processing and resolution delays for applications successfully submitted into the E-Tran system

    The SBA E-Tran system is flagging 20% to 30% of all first- and second-draw PPP applications for additional review based on validation checks, the AICPA letter said, noting that there are more than 40 different “error codes” related to these additional information requests.

    The letter outlines the following example: “One of the new requirements for second-draw sole proprietor applications is to use an EIN number instead of their SSN, even though many used their SSN with their original PPP application. This new requirement is causing the application to be declined, since one of the acceptance validation checks is to confirm the same number as the original PPP application. The overall top reason for decline is discrepancy with Applicant Tax ID, and the steps to correct this issue do not seem to be working in most cases. For instance, the system appears to report errors even in cases where the borrower used the same EIN on both applications and can demonstrate this fact to the lender.”

    The process for resolving the “error codes” is unclear and small business owners are being surprised by them, the letter said. The AICPA requests that the SBA provide further clarity and, even more importantly, communicate publicly that nearly one-third of all applications are receiving these requests for further review, which could delay processing by a week or more.

    SBA capping of first- and second-draw PPP loan amount

    SBA’s loan processing system has put in place a loan eligibility amount cap of $35,000 per employee for both first- and second-draw applications, the AICPA letter says, adding that the cap results in the SBA E-Tran system reducing the approved loan amounts. The AICPA asks the SBA to provide clear guidance related to these PPP loan caps because small businesses are confused when their loan amount is reduced with no explanation.

    Broad communication on available funding, overall processing and timing

    The letter recommends broader communication from the SBA confirming that there is sufficient funding to support all first- and second-draw PPP loan requests. The SBA also is urged to provide clear communication that processing time could be one to two weeks due to the increased validation checks and reviews.  

    Despite the system issues, the SBA approved nearly 900,000 loans totaling $72.7 billion from Jan. 11 through Jan. 31, leaving almost $212 billion available. Applications for PPP loans close March 31, 2021.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a virtual town hall held most weeks on Thursday at 3 p.m. ET, including on Feb. 4. The webcasts, which provide CPE credit, are free to AICPA members and $39.99 for nonmembers. Go to the AICPA Town Hall Series webpage for more information and to register.

    The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

    Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.

    For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

    — Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.


  • 01/20/2021 8:58 AM | Anonymous member (Administrator)

    January 20, 2021

    By Jeff Drew

    The US Small Business Administration (SBA) and Treasury on Tuesday published updated Paycheck Protection Program (PPP) loan forgiveness guidance and forms, including a one-page application for borrowers that received a PPP loan of $150,000 or less.

    That form, called the PPP Loan Forgiveness Application Form 3508S, can be used by borrowers that received a PPP loan of $150,000 or less. The form seeks information about the borrower’s loan amount, disbursement date, employee totals, covered period dates, amount of the loan spent on payroll, and the amount of the loan for which forgiveness is being sought. Borrowers are not required to submit any supporting documentation with the application but are mandated to maintain payroll, nonpayroll, and other documents that could be requested during an SBA loan review or audit.

    The SBA and Treasury released two other PPP loan forgiveness applications: Form 3508 and Form 3508EZ. Borrowers must submit payroll and nonpayroll documentation when applying for loan forgiveness with those forms, which provide lists of the required documents. In addition, the SBA and Treasury released Form 3508D, which certain individuals must use to disclose controlling interest in an entity applying for a PPP loans.

    Also released Tuesday night was an interim final rule (IFR) consolidating prior PPP loan forgiveness rules and incorporating changes made by The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260, which revived the PPP with $284 billion in fresh funding and created second-draw loans, which allow borrowers that received PPP loans during the first iteration of the program last year to seek a second loan of up to $2 million provided they meet tightened size requirements and can document a year-over-year revenue decrease of at least 25% for one reporting period in 2020.

    The IFR and all four of the forms released Tuesday night apply to first-draw or second-draw PPP loans.

    The relaunched PPP began accepting applications Jan. 11 from community financial institutions that loan primarily to underserved businesses. The application window opened Jan. 14 for lenders with $1 billion or less in assets and for all lenders on Tuesday.

    The SBA announced Tuesday that that it approved about 60,000 PPP loan applications submitted by nearly  3,000 lenders, for over $5 billion from the program’s re-opening through Jan. 17.

    AICPA experts will provide a summary of the latest PPP forms and guidance during an online Town Hall on Thursday at 3 p.m. ET. The event is free for AICPA members and $39.99 for nonmembers.

    Accounting firms can prepare and process applications for the PPP on the CPA Business Funding Portal, created by the AICPA, CPA.com, and fintech partner Biz2Credit.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

    The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

    For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

    — Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.


  • 01/15/2021 8:37 AM | Anonymous member (Administrator)

    January 14, 2021

    By Jeff Drew

    The .cpa domain application window will open Friday for licensed CPAs to apply for on an individual basis, the AICPA announced.

    Beginning at 10 a.m. ET Friday, individual CPAs can request their preferred branding using .cpa, which is the restricted internet domain for the accounting profession. Thousands of licensed CPA firms and approved organizations, such as state CPA societies, submitted applications for .cpa domains from the program’s launch on Sept. 1 through 6 p.m. ET on Thursday.

    The AICPA was awarded ownership and management of .cpa in 2019 by the Internet Corporation for Assigned Names and Numbers. CPA.com, the AICPA’s business subsidiary, administers and manages the .cpa domain.

    Top-level domains are the handful of letters at the end of an email or website address, such as .com or .org. Use of a .cpa domain allows practitioners to strengthen their brand identity in online communications and provides better security and resistance to internet fraud schemes such as phishing and spoofing, the AICPA said. And because the domain is available only to licensed CPAs and licensed CPA firms, it promotes greater trust with clients and the general public.

    To learn more about .cpa or to apply for the new service, visit register.domains.cpa.

    — Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.


  • 01/14/2021 10:29 AM | Deleted user

    By Rick Meyer, CPA, MBA, MST

    As we start the New Year, hopefully fresh from all the tax drama, we

    can at least take a deep breath and rejoice about some Covid-19 tax relief. On

    Sunday, December 27, 2020, the President signed into law, what is called, the

    Consolidated Appropriations Act (CAA), a combination of Covid-19 relief

    along with many other provisions amongst the 5,593 pages.

    It seems that with all new tax law, it boils down to some basic chunks of

    data:

    1. The Headliner (we’ve all heard and read about) provisions,

    2. The Extenders,

    3. The Esoteric provisions, and

    4. Everything Else

    This last “everything else” category is where all the fun begins...the never

    ending search to find those buried treasures in the new law. Let’s briefly

    discuss the first three categories and then spend most of our time discovering

    some of those “everything else” hidden gems!

    The Headliner Provisions – The $600 payment per person, expansion of the

    PPP loans, and unemployment benefits,

    The Extender Provisions – 5 year extensions for the Work Opportunity, New

    Markets and Empowerment Zone credits, and the exclusion of income for the

    employee on up to $5,250 of student loans paid by the employer,

    The Esoteric Provisions – Tax reductions for wine, liquor, spirits and beer,

    and of course, we can’t forget about the three-year recovery period for race

    horses.

    The EVERYTHING ELSE Provisions:

    Let’s jump into a few that I would consider to be gems, worthy of discovery:

    Employee Retention Credit

    This is huge! Previously in the original CARES ACT, the employee retention

    credit was the lost sheep. With some new changes, employers could get a big

    payroll tax credit for keeping their employees on the payroll!

    This is now a 70% credit on up to $10,000 of qualified wages per employee,

    PER QUARTER, for the first two quarters in 2021, through June 30, 2021.

    Thus, if employers qualify, they can claim up to $14,000 credit per employee

    in 2021.

    Plus, this even works with employers with up to 500 employees! Note, that

    this is a refundable payroll tax credit offsetting the employer’s portion of

    payroll taxes. So, if these credits exceed payroll taxes, you could get a refund!

    To qualify, the employer’s gross receipts for the first two 2021 calendar

    quarters must be at least 20% less than the 2019 quarter. Alternatively,

    employers can elect to use the prior quarter’s gross receipts to qualify.

    There are various complexities and unanswered questions about how the

    Employee Retention Credit will impact other wage based credits in the tax law

    and how to best optimize utilization of all available credits. A detailed and

    thorough analysis needs to be done with each taxpayer’s facts and

    circumstances. Also, there will need to be further guidance from the IRS and

    Treasury. We continue to be in discussions with current and former members

    of Congress and high level IRS Officials to gain clarity, insight, and

    Congressional intent on this very special and potentially valuable credit.

    PPP (Payroll Protection Program) Loans and Expense Deduction

    The new law clarifies that business expenses paid with forgiven PPP loans are

    tax deductible.

    Section 179D Made Permanent

    If you are an architect, engineer, or contractor, or a CPA with any of these

    clients, this is a huge opportunity for them to claim this, now permanent

    deduction. This deduction applies if they are encouraging green, energy

    efficient design of public buildings. This would include improvements to the

    building envelope, lighting, heating, cooling, ventilation, and hot water

    systems.

    The deduction could be up to $1.80 per square foot. Although the architect,

    engineer, or contractor doesn’t own the public building, they could be

    allocated this deduction from the government entity. It’s like a free deduction!

    Since it is calculated based on square footage, a large high school, elementary

    school, or public library could yield a sizable deduction to the architect,

    engineer or contractor. This concept also applies to owners of commercial

    buildings.

    Section 179D encourages energy efficient designs while reducing energy costs

    for all. It’s a win-win for architects, engineers, contractors, the government,

    taxpayers, and commercial building owners!

    Meal Deduction

    For 2021 and 2022, the 100% deduction for business meal food and beverage

    is back! This includes carry-out and delivery meals.

    Charitable Contributions

    The non-itemizer, above-the-line deduction for cash charitable contributions

    increases to $600 for married taxpayers filing jointly (non-married filers or

    married filing separately are limited to $300).

    Relief for FSA (Flexible Spending Account)

    Remember the “use it or lose it” rule requiring employees to spend money in

    their FSA account for health or dependent care by year end, or lose this

    money? The old rules did allow a carryover of unused funds of $560 to 2021.

    Well, my daughter has been frantically calling me since June of 2020. She had

    over $2,000 contributed to her dependent care FSA. Then, her daycare center

    closed in June, 2020 due to Covid. How could she get this money back? She

    had no other daycare expenses since the family was volunteering to watch the

    kids for free. Would she lose over $2,000 of her hard earned money?

    Well, this little gem of a law eliminates the health and dependent care

    carryover limit. Now, employees could carryover any unused amount from

    either the 2020 or 2021 plan year to the next year.

    What’s Next?

    Buried within the 5,593 pages are many other provisions and hidden gems

    that will need to be discovered, understood, and put to use. We teased you

    here with just a few. Be prepared to read and find more buried treasures that

    could help you or your clients. Whoever said that Congress is trying to simplify

    the Tax Code? Hang in there, get your fingernails dirty and get digging!

    Rick Meyer, CPA, MBA, MST is a long time member of the Illinois CPA Society and has served on various tax committees over the past 40+ years. He is a Director for alliant group, a national firm that works with businesses and their CPAs to identify powerful government sponsored tax credits and incentives. He could be contacted at rick.meyer@alliantgroup.com.

     


  • 01/14/2021 10:28 AM | Anonymous member (Administrator)

    January 13, 2021

    By Jeff Drew

    The application window for Paycheck Protection Program (PPP) forgivable loans will open Friday for lenders with $1 billion or less in assets, the US Small Business Administration and Treasury announced.

    The opening, which will take place at 9 a.m. ET, applies for both first- and second-draw PPP loans.

    The program will begin accepting applications for first- and second-draw loans from large lenders on Tuesday, Jan. 19.

    PPP reopened Monday initially for community financial institutions (CFIs) to make loans to first-time PPP borrowers. CFIs were allowed to make second-draw loans to previous PPP recipients starting Wednesday.

    CFIs typically work with underserved small businesses. SBA and Treasury granted the initial early access to PPP so these small businesses, which include many minority- and women-owned concerns, could get first crack at accessing the $284.5 billion in PPP funding approved in the part of the $900 billion COVID-19 relief bill that was signed into law on Dec. 27.

    The AICPA issued a news release earlier Wednesday encouraging accounting firms to aggressively advance PPP applications for small businesses in anticipation of the SBA beginning to accept applications from all lenders.

    “We believe the full program needs to go live as soon as possible and we fully support the Treasury Department and SBA reopening the program for all lenders,” said AICPA President and CEO Barry Melancon, CPA, CGMA, in the news release. “What we’ve been telling CPA firms is be prepared and get to work. All indications, based on input from the Treasury and SBA, is there will be enough funding to meet all of the ‘first draw’ and ‘second draw’ PPP applications, so firms can help alleviate concerns their clients may have.”

    The AICPA has been advising firms to collect key information from their clients such as average monthly payroll amounts, quarterly revenue for second-draw borrowers, and other required documentation to speed the process.

    AICPA executives will discuss the latest PPP developments and their implications for CPAs and their small business clients at this week’s AICPA Town Hall at 3 p.m. ET on Thursday.

    PPP funding, forms and guidance

    Accountants played a key role in helping small businesses secure needed funding during the first iteration of PPP, which provided $525 billion in forgivable loans over five months before it stopped accepting applications in August. The $284.5 billion in fresh PPP funding includes set-asides of $35 billion for first-time loans and $15 billion set aside for CFIs.

    The SBA and Treasury issued guidance Jan. 6 for the new PPP, which shares many of the same rules as the old PPP but also has some significant differences. Application forms for first- and second-draw loans were released a couple of days later.  

    Quick overview of the new PPP

    In general, first- and second-time PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs (with a cap per employee of $100,000 annualized) in 2019, 2020, or the year prior to the loan. PPP borrowers with North American Industry Classification System (NAICS) codes starting with 72 (such as hotels and restaurants) can receive up to 3.5 times their average monthly payroll costs on second-draw loans.

    The loans are capped at $10 million for first-time borrowers and $2 million for second-time PPP borrowers.

    PPP first- and second-draw loans may qualify for forgiveness if the funds are used on the following eligible costs: payroll, rent, covered mortgage interest, and utilities, covered worker protection and facility modification expenditures, covered property damage costs, covered payments to suppliers and payments for business software or cloud computing services that facilitate business operations, product or service delivery, and a number of back-office functions, including accounting.

    To be eligible for full loan forgiveness, PPP borrowers must spend no less than 60% of the funds on payroll over a covered period of their choice between eight and 24 weeks.

    Borrowers are eligible for a second-draw PPP loan of up to $2 million, provided they have:

    • 300 or fewer employees.
    • Used or will use the full amount of their first PPP loan on or before the expected date for the second PPP loan to be disbursed to the borrower. The IFR also clarifies that the borrower must have spent the full amount of the first PPP loan on eligible expenses.
    • Experienced a revenue reduction of 25% or more in all or part of 2020 compared with all or part of 2019. This is calculated by comparing gross receipts in any 2020 quarter with an applicable quarter in 2019, or, in a provision added in the IFR, a borrower that was in operation for all four quarters of 2019 can submit copies of its annual tax forms that show a reduction in annual receipts of 25% or greater in 2020 compared with 2019.

    First time PPP loans are available to borrowers that were in operations on Feb. 15, 2020 and are from one of the following groups:

    • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
    • Sole proprietors, independent contractors, and eligible self-employed individuals.
    • Not-for-profits, including churches.
    • Accommodation and food services operations with NAICS codes starting with 72 that have fewer than 500 employees per physical location.
    • Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” that have 300 or fewer employees and do not receive more than 15% of receipts from lobbying. The lobbying activities must comprise no more than 15% of the organization’s total activities and have cost no more than $1 million during the most recent tax year that ended prior to Feb. 15. 2020. Sports leagues are not eligible.
    • News organizations that are majority-owned or controlled by an NAICS code 511110 or 5151 business or not-for-profit public broadcasting entities with a trade or business under NAICS code 511110 or 5151. The size limit for this category is no more than 500 employees per location.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

    The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.

    For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page or subscribe to our email alerts for breaking PPP news.

    — Jeff Drew (Jeff.Drew@aicpa-cima.com) is a JofA senior editor.


  • 01/14/2021 10:20 AM | Anonymous member (Administrator)

    January 14, 2021

    WASHINGTON – The U.S. Small Business Administration, in consultation with the U.S. Treasury Department, will re-open the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on Friday, January 15, 2021 at 9 a.m. EST. The portal will fully open on Tuesday, January 19, 2021 to all participating PPP lenders to submit First and Second Draw loan applications to SBA.

    Earlier in the week, SBA granted dedicated PPP access to Community Financial Institutions (CFIs) which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries as part of the agency’s ongoing efforts to reach underserved and minority small businesses.

    On Friday, SBA will continue its emphasis on reaching smaller lenders and businesses by opening to approximately 5,000 more lenders, including community banks, credit unions, and farm credit institutions.  Moreover, the agency also plans to have dedicated service hours for these smaller lenders after the portal fully re-opens next week.

    “A second round of PPP could not have come at a better time, and the SBA is making every effort to ensure small businesses have the emergency financial support they need to continuing weathering this time of uncertainty,” said SBA Administrator Jovita Carranza. “SBA has worked expeditiously to ensure our policies and systems are re-launched so that this vital small business aid helps communities hardest hit by the pandemic. I strongly encourage America’s entrepreneurs needing financial assistance to apply for a First or Second Draw PPP loan.”

    “We are pleased to have opened PPP loans to CDFIs, MDIs, CDCs, and Microloan Intermediaries.  The PPP is already providing America’s small businesses hardest hit by the pandemic with vital economic relief,” said Secretary of the Treasury Steven T. Mnuchin. “As the Program re-opens for all First and Second Draw borrowers next week, the PPP will allow small businesses to keep workers on payroll and connected to their health insurance.”

    First Draw PPP Loans are for those borrowers who have not received a PPP loan before August 8, 2020. The first round of the PPP, which ran from March to August 2020, was a historic success helping 5.2 million small businesses keep 51 million American workers employed.  

    Second Draw PPP Loans are for eligible small businesses with 300 employees or less, that previously received a First Draw PPP Loan and will use or have used the full amount only for authorized uses, and that can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million. 

    Updated PPP Lender forms, guidance, and resources are available at www.sba.gov/ppp and www.treasury.gov/cares.

    ###

    About the U.S. Small Business Administration

    The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov


  • 01/13/2021 10:31 AM | Anonymous member (Administrator)

    January 13, 2021

    The AICPA expects the federal government to open up the application process for all lenders participating in the latest round of the Paycheck Protection Program by Friday, and encourages CPA firms to advance the application process for small business clients seeking relief.

    The Small Business Administration (SBA) began accepting new applications on a limited basis this week through community financial institutions. But confusion about the timing for other lenders has led to anxiety among small businesses and their advisers.

    “We believe the full program needs to go live as soon as possible and we fully support the Treasury Department and SBA reopening the program for all lenders by Friday,” said AICPA President and CEO Barry Melancon, CPA, CGMA. “What we’ve been telling CPA firms is be prepared and get to work. All indications, based on input from the Treasury and SBA, is there will be enough funding to meet all of the ‘first draw’ and ‘second draw’ PPP applications, so firms can help alleviate concerns their clients may have.”

    The AICPA has been advising firms to collect key information from their clients such as average monthly payroll amounts, quarterly revenue comparisons for second-draw borrowers, and other required documentation to speed the process. Compared to the initial launch of the program in April 2020, firms now have substantial experience in business relief, more guidance, and better tools.

    The AICPA, CPA.com, and fintech company Biz2Credit in September launched a financing platform for CPA firms, the CPA Business Funding Portal, to help practitioners as they assist small businesses through PPP loan forgiveness. The portal, which has been used by thousands of firms, has been updated to accept so-called PPP2 applications and over 3,000 applications have already been prepopulated.

    “Small businesses should expect more scrutiny in this round of PPP applications,” said Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s business subsidiary. “The SBA is doing more vetting for potential fraud and in some instances is asking for more validation. It’s important that businesses and their advisers get it right, so that applications don’t get held up and pushed back in the queue. That’s why we think it’s vital that firms use the more robust set of tools that are available now.”

    The CPA Business Funding Portal offers a free basic service, plus tiered subscription plans for firms that want a direct path to fund loans through an SBA-approved lender to ensure they receive agent fees.

    “It is critical that business owners work closely with their trusted business advisers, especially their CPA, to ensure they qualify for the maximum loan amount and provide the right supporting documentation,” said Rohit Arora, CEO and Co-Founder of Biz2Credit. “Being prepared now is the best way for businesses to ensure they get the money they need.”

    AICPA executives will discuss the latest PPP developments and their implications for CPAs and their small business clients at this week’s AICPA Town Hall at 3 p.m. ET on Thursday. For more information about the AICPA’s resources for firms on PPP, please visit aicpa.org/sba. More details about the CPA Business Funding Portal can be found at cpa.com/business-funding.

  • 01/07/2021 8:35 AM | Anonymous member (Administrator)

    January, 7 2021

    By Jeff Drew

    The U.S. Small Business Administration (SBA) and Treasury issued guidance late Wednesday night for the reconstituted Paycheck Protection Program (PPP).

    The guidance came in the form of two interim final rules (IFRs).

    • The 82-page IFR “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” consolidates the rules for PPP forgivable loans for first-time borrowers and outlines changes made by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, P.L. 116-260).
    • The 42-page IFR “Business Loan Program Temporary Changes; Paycheck Protection Program Second Draw Loans” lays out the guidelines for new PPP loans to businesses that previously received a PPP loan.

    The AICPA will provide a detailed review of the new guidance in a virtual Town Hall today at 3 p.m. ET. The webcast is available for free to AICPA members.

    The JofA will update this article with details about the new PPP guidance later this morning. Following is a summary of the new program as described in the Economic Aid Act.

    PPP2 overview

    Congress revived the PPP as part of the $900 billion COVID-19 relief bill that was signed into law on Dec. 27. The program provided $525 billion in forgivable loans over five months before it stopped accepting applications in August. The Economic Aid Act rebooted PPP (or PPP2, as some call it) with many of the same parameters as the first program but also several important differences from the original PPP.

    One of the biggest changes is making PPP funding available to businesses that previously received a PPP loan. Business are eligible for a second PPP loan of up to $2 million, provided they have 300 or fewer employees, have used or will use the full amount of their first PPP loan, and can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

    Fresh PPP loans also are available to first-time borrowers from the following groups:

    • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
    • Sole proprietors, independent contractors, and eligible self-employed individuals.
    • Not-for-profits, including churches.
    • Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.

    The legislation also allows borrowers that returned all or part of a previous PPP loan to reapply for the maximum amount available to them.

    PPP loan terms

    As with PPP1, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. PPP2 also makes the following potentially forgivable:

    • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
    • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
    • Covered operating costs such as software and cloud computing services and accounting needs.

    To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks — the same parameters PPP1 had when it stopped accepting applications in August.

    PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, the same as with PPP1, but the maximum loan amount has been cut from $10 million in the first round to the previously mentioned $2 million maximum. PPP borrowers with NAICS codes starting with 72 (hotels and restaurants) can get up to 3.5 times their average monthly payroll costs, again subject to a $2 million maximum.

    Simplified application and other terms of note

    The new COVID-19 relief bill also:

    • Creates a simplified forgiveness application process for loans of $150,000 or less. Specifically, a borrower shall receive forgiveness if the borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA must create the simplified application form within 24 days of the bill’s enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud.
    • Repeals the requirement that PPP borrowers deduct the amount of any Economic Injury Disaster Loan advance from their PPP forgiveness amount.
    • Includes set-asides to support first- and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lenders.

    AICPA experts discuss the latest on the PPP and other small business aid programs during a biweekly virtual town hall. The webcasts, which provide CPE credit, are free to AICPA members. Go to the AICPA Town Hall Series webpage for more information and to register.

    The AICPA’s Paycheck Protection Program Resources page houses resources and tools produced by the AICPA to help address the economic impact of the coronavirus.


  • 12/22/2020 8:12 AM | Anonymous member (Administrator)

    Shutterstock_1489697975We need to practice self-care now more than ever — in the face of an unprecedented crisis, surrounded by the unknown. Even without the pandemic adding stress to our lives, anxiety, sadness and self-doubt can affect us at any time. May is Mental Health Awareness Month, making this an ideal opportunity to learn how to manage your feelings with patience and kindness.

    Whether it’s taking moments to acknowledge how you feel in times of turmoil, using your senses to create calm for yourself while working from home or adapting to the changing expectations of your job, there are many simple steps you can take to promote your physical and mental well-being. We’ve compiled the following resources to help you get started:

    Permission to be selfish. Even if you can’t take a typical vacation, you need to take some time off and prioritize your needs and wants. By managing a healthy recovery, you’ll become a better coworker, friend and family member.  

    Stress-busting senses. Our five senses can do more than their expected external duties — they can help us find internal balance, too.

    Accept the changing situation. The world may seem like it’s upside down now, but you can still create stability for yourself. Here are tips on how to reduce anxiety and isolation.   

    Managing WFH. You’ve suddenly found yourself working from home, and it’s a lot to take in. Whether it’s the isolation that gets to you or the pressure to parent while working, here are some insights to help you manage.

    Productivity hacks. Streamlining your approach to work helps you become more productive, increases your focus and reduces stress.

    Self-care every day. Don’t leave it for when you’re drowning underneath the stress of work and expectations — carve out some time for self-care every day. We break down the what and how.

    Healthy stomach, healthy mind. When you’re busy, you tend to choose food for convenience rather than health. But your food choices have lasting effects — why not make them positive?

    Choose to improve. Thriving means evolving with the times. Come up with resolutions to become more effective —whether at work, at home or in your downtime.

    Lead with support. If you’re a manager, you may be seeing some of your employees struggle with stress. Here’s how you can help.

    Thrive and be well. You can make the choice not just to prioritize wellness, but to thrive in your environment. Try these two proven methods.

    Separate work and self. Compartmentalizing work, how work makes us feel and the need for downtime can be stressful. This is where mindfulness comes in to help you create a healthy working environment.

    Mindfulness matters. Busy season can take a lot out of a person, but our six-part podcast shows you there are ways to reorient yourself to find mental peace among the distractions.

    Making the time to step back and take a deep breath can work wonders for your mind, body and spirit. When work anxiety and the weight of expectations seem too much, remember that you can take positive actions and be kind to yourself. It may be the final day of Mental Health Awareness Month, but our efforts to support you will continue year round.

    Association Staff

    Posted by AICPA Communications on May 31, 2020 in Human Intelligence


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