Last week the President signed the PPP Flexibility Act changing many key aspects of the PPP process.  Since that signing, the SBA updated its’ regulations and issued additional guidance on the new 60% payroll test.   Additionally, over the last several weeks the SBA issued both instructions and forgiveness regulations along with regulations addressing the PPP audit process. The heart of this class will be the form itself and will show the attendees how to complete the form on a line-by-line basis.   At the same time, we will address each and every aspect of the PPP Flexibility Act and discuss how the Act likely changes your strategy.

In a series of instructions only a math major could love, the SBA issued the new “PPP Forgiveness” form and related regulations which involves a myriad of computations and accounting precepts destined to challenge all of us. The “Incurred and paid” statutory guidance being the most perplexing. Largely, because the “incurred and paid” hybrid method of accounting will be nearly impossible to implement.   

While the new SBA instructions offer pragmatic guidance not addressed by the CARES Act, the new rules involve tax and computational items that pose traps for the unwary. The FTE rehiring and reestablishing of wages will also allow borrowers to “cure” the impact of two of the three forgiveness tests. Finally, we will address the newly issued SBA audit and appeal regulations.

Specifically, this course will focus on:
 

• The 60% payroll test


• The 24-week covered period


• How to complete the SBA forgiveness form


• Last-minute ideas to maximize forgiveness


• Building a file in-case of an SBA or IRS audit


• The income tax deductibility issue and action steps


• Tricky issues, such as related party rent and contributions to profit-sharing plans


• Understanding the new SBA "PPP Forgiveness" regulations and instructions


• Impact of the new Rules under the cash and accrual basis of accounting including the Alternative Payroll Covered Period


• What does “incurred and paid” mean versus “incurred or paid”


• Forgiveness for rent, payroll and interest expense including related party rent


• How to account for pension and profit-sharing plans


• How to determine the amount of the PPP Loan available for forgiveness


• What are “covered expenses"?


• How does the "full-time equivalent" ("FTE") test work?


• Computing the "salary reduction" test


• Re-hiring employees to avoid the "salary reduction" test


• Understanding the SBA's old "75% payroll" test and the new 60% payroll test in the Bill signed by the President


• Understanding the PPP aspects of the proposed HEROES bill


• Understanding the income tax aspects of the proposed HEROES bill


• Protective claims on the income tax side