New guidance has emerged from the Small Business Administration with another interim final rule—this new rule clarifies certain key changes made to the Paycheck Protection Program (PPP) by the Paycheck Protection Program Flexibility Act (PPPFA) signed into law on June 5, including:

• Extending the period in which expenses paid with a PPP loan could be eligible for loan forgiveness from 8 to 24 weeks from a loan’s origination (not to extend beyond December 31, 2020).
• Allowing borrowers who received a PPP loan before enactment of the June 5 legislation to elect that the covered period run for 8 (vs. 24) weeks
• Clarifying the amount of loan forgiveness can be up to the full principal amount of the loan plus accrued interest and caps the payroll costs during the covered period to $46,154 per employee (24 week covered period) or $15,385 per employee (8 week covered period) plus covered benefits for employees (but not owners).
• Clarifying the maximum amount of forgiveness for S-Corporation Shareholders, general partners, and self-employed individuals is determined by calculating owner compensation replacement limited to 2.5/12 of 2019 net profit up to $20,833 (24 week covered period) or limited to 8/52 of 2019 net profit up to $15,385 (8 week covered period).
• Lowering the requirements that 75% of a borrower’s loan proceeds must be used for payroll costs and that 75% of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60% for each of these requirements. If a borrower uses less than 60% of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60% of the loan forgiveness amount having been used for payroll costs.
• Extending the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
• Providing a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.

Download a copy of the June 16, 2020 revised Loan Forgiveness Application Instructions, 

Download a copy of the revised Loan Forgiveness Application Form 3508EZ.

The last day which a PPP loan application can be approved remains June 30, 2020.

The PPP loan forgiveness process is time consuming and complicated, even more so than the PPP application process itself – calculations are complex and supporting documentation needs to be thorough and succinctly compiled. If you have any questions regarding your PPP loan or need assistance completing your loan forgiveness application and calculating your loan forgiveness amount, please contact John Priola.

We will continue to keep you updated on the changes to this program as they are released.

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.

On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA). The PPPFA will provide additional flexibility to many borrowers attempting to maximize the benefits provided by the Paycheck Protection Program (“PPP”) established as part of the CARES Act.

The following are highlights of the PPPFA:

• The PPPFA reduces the amount of the loan needed to be spent on payroll from 75% to 60%. Note that the law does not change the list of expenses eligible for forgiveness; rent, mortgage payments, utilities, and interest on loans.
• The PPPFA extends the time period to spend the loans to 24 weeks. While businesses will still need to spend the money on payroll and authorized expenses, they now have until the end of 2020 to do so.
• For salaries to count towards forgiveness, previous guidelines stated that all workers had to be rehired by June 30, 2020. Under the new law, businesses now have until December 31, 2020, to rehire workers in order for their salaries to count towards forgiveness.
• In addition to extending the rehire date, the law also adds additional exceptions for a reduced head count. The PPPFA states a business can still receive forgiveness on payroll amounts if it:
  • Is unable to rehire an individual who was an employee of the eligible recipient on or before February 15, 2020;
  • Is able to demonstrate an inability to hire similarly qualified employees on or before December 31, 2020; or
  • Is able to demonstrate an inability to return to the same level of business activity as such business was operating at prior to February 15, 2020.
• A business now will have five years at 1% interest to repay the loan. Additionally, the first payment will be deferred for six months after the SBA makes a determination on forgiveness.
• The PPPFA permits borrowers to delay the payment of employer payroll taxes until December 31, 2021 (with respect to up to 50% of the amounts due) and December 31, 2022 (with respect to the remaining amounts due up to 50%). Borrowers were previously prohibited from this benefit if their loans were forgiven in whole or in part.

Employers should also continue to diligently document their use of the funds, so when loan forgiveness time comes, they can quickly and accurately substantiate their use of the loan and increasing the odds of full forgiveness. 

If you have any questions regarding your PPP loan or need assistance completing your PPP loan forgiveness application and calculating your loan forgiveness amount, please contact John Priola. 

Visit the Reynolds + Rowella COVID-19 Resource Center for further guidance with answers to frequently asked questions and regulations with interim final rules as they becomes available.

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.

The Treasury and Small Business Administration (SBA) released two new Interim Final Rules (IFR) – one on Loan Review Procedures and one covering Loan Forgiveness.

The first one on loan review procedures and related borrower and lender responsibilities contains primarily new, important information related to the forgiveness process, lender’s responsibilities when reviewing forgiveness applications, and SBA’s authority to review loans.

IFR on Loan Review Procedures and Related Borrower and Lender Responsibilities

The second interim final rule on forgiveness contains some new information as well as finalizes in a rule form much of the information found in the new forgiveness application and prior Treasury FAQs that were previously issued – click here for article related to the application and FAQs.

One new helpful FAQ is related to whether bonus pay or hazard pay during the 8-week covered period may be included in the definition of “payroll costs.” The interim final rule clarifies that the payment of bonuses and hazard pay to employees are eligible for loan forgiveness. Total compensation, including bonuses and hazard pay, cannot exceed $15,385 per employee. The use of bonuses may be an excellent way for business owners to meet the PPP payroll requirements, while also recognizing those employees who worked through, and continue to work through, very challenging circumstances.

IFR on Loan Forgiveness

Additionally, Congress is considering legislation that will give small businesses more flexibility in spending their PPP loans. We will keep you informed of all new developments. Please continue to check the visit the R+R COVID-19 Resource Center section of our website for updates.

Remember – any amount that is not forgiven must be re-paid. If you need assistance completing your PPP loan forgiveness application and calculating your loan forgiveness amount, please contact John Priola. 

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.

More and more companies across are either asking employees to work from home, or maybe even temporarily shutting down. The CDC and other health groups remind us to wash our hands, cover our coughs and sneezes, wear a mask and practice social distancing—but what can workplaces do about this virus? Well, the Occupational Safety and Health Administration (OSHA) has prepared some guidance for that big question!

The OSHA Guidance on Preparing Workplaces for COVID-19 addresses several common questions about how to prepare for, and deal with, the coronavirus in the workplace. Below are some points from the OSHA advisory report to help you consider workplace safety through a new lens.

LEARN MORE ON THE GUIDANCE ON PREPARING WORKPLACES FOR COVID-19

Develop an Infectious Disease Preparedness and Response Plan;

Employers develop an infectious disease preparedness and response plan that addresses level(s) of risk associated with their worksites and the tasks performed at those sites. Such considerations may include:

• Where, how, and to what sources of COVID-19 workers may be exposed to, including, for example, the general public, customers, coworkers, sick individuals, or individuals at particularly high risk of infection
• Non-occupational risk factors at home and in the community
• Workers’ individual risk factors, such as advanced age, chronic medical conditions, and pregnancy
• Controls necessary to address those risks
  

Develop, Implement, and Communicate about Workplace Flexibilities and Protections; maintaining flexibility when dealing with HR matters, including:

• Actively encouraging sick workers to stay home
• Ensuring and making workers aware of sick leave policies that are flexible and consistent with public health guidance
• Impressing upon staffing agencies the importance of sick workers staying home
• Recognizing that health care providers may be overtaxed during this crisis, refraining from requiring workers to immediately obtain a health care provider’s certification to validate illness or to return to work
• Maintaining flexibility to allow workers to stay home to care for sick family members
• Being sensitive to workers’ concerns about pay, leave, safety, health, and other issues that may arise during infectious disease outbreaks
• Providing appropriate training about business-essential job functions and worker health and safety, including proper hygiene practices and the use of any workplace controls (including PPE)

Implement Workplace Control; preventing exposure to COVID-19 hazards through the following:

• Engineering controls. Physical measures include using high-efficiency filters, increasing ventilation, and installing physical barriers such as clear plastic sneeze guards.
• Administrative controls. This involves HR policies, safety equipment and procedure training.
• Safe work practices. Examples include “no-touch” trash cans and alcohol-based hand rubs.
• Personal protective equipment (PPE). This includes gloves, goggles, face shields, etc. Note: While there’s no COVID-19-specific OSHA PPE standard, some regulations may apply here.

Implement Basic Infection Prevention Measures; These measures should include:

• Frequent and thorough hand washing by employees, customers, and worksite visitors (if soap and running water are not available, provide hand wipes containing at least 60 percent alcohol)
• Encouraging sick or symptomatic employees to stay home
• Providing customers and the general public with tissues and no-touch trash receptacles
• Establishing flexible worksites and/or flexible work hours (e.g., staggered shifts) to increase physical distance among employees and others
• Discouraging employees from using others’ phones, desks, offices, tools, and other equipment, and maintaining regular and routine cleaning and disinfecting with EPA-approved products

LEARN MORE ABOUT EPA-APPROVED PRODUCTS

Reynolds + Rowella’s HR Consulting team is here to assist you in implementing the OSHA’s guidance to create a plan tailored to your business or other employment challenges related to COVID-19. Please reach out to Katie Hall for assistance.

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.

The Small Business Administration (SBA) has released new guidance regarding the good-faith certification for Paycheck Protection Program (PPP) loans.

On May 13th, 2020, the SBA established a “safe harbor” for borrowers receiving PPP loans with an original principal amount of less than $2 million.

The new safe harbor was made by adding “FAQ 46” to the SBA’s previously-issued PPP guidance. FAQ 46 provides that any borrower which, together with affiliated entities, receives PPP loans with an original principal amount of less than $2 million “…will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”

PPP Loan FAQs

Borrowers whose PPP loans over the $2 million threshold may be subject to review by the SBA for compliance with program requirements, including the certification of economic need.

Please contact John Priola with any questions regarding your organizations PPP loan and the safe harbor rule.

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.

On April 24, the Small Business Administration (SBA) and Department of the Treasury published a Q&A outlining how businesses of varying structures can calculate their payroll costs to determine the value of loans they are eligible to receive through the Paycheck Protection Program (PPP).

The guidance, formatted in a Q&A format, provides information and steps for a variety of small businesses including: self-employed with no employees; self-employed with employees; documentation  business owners will provided depending on how they report their income; how partnership should apply for PPP loans; how is the maximum PPP loan amount is calculated for S corporations and C corporations; how it is calculated for eligible nonprofit organizations, nonprofit religious institutions, veterans organizations, and tribal businesses; and what other documentation can be provided for the purpose of substantiating the applied-for PPP loan amount.

As noted by the guidance document: “The U.S. government will not challenge lender PPP actions that conform to this guidance and to the PPP Interim Final Rules and any subsequent rule making in effect at the time.”

TO READ THE FULL Q&A, click here.

If you have any questions about your eligibility for PPP loans or how to apply for one, contact a Reynolds + Rowella advisor.

REYNOLDS & ROWELLA | ACCOUNTING AND CONSULTING

Reynolds + Rowella is a regional accounting firm known for a team approach to financial problem solving. As Certified Public Accountants, our partners foster a personal touch with our clients. As members of DFK International/USA, an association of accountants and advisors, our professional network is international, yet many of our clients have known us for years through the local communities we serve.

The firm has offices at 90 Grove St., Ridgefield, Conn., and 51 Locust Ave., New Canaan, Conn. For more information, give us a call at 203.438.0161 or email us.