2.2 Million in loans during second round so far - FADA has some lender contacts if you need help
Yesterday the Trump Administration reported 2.2 million PPP loans had been processed, totaling more than $175 billion in aid. The average loan is $79,000. NADA urges dealers to review itsCARES Act FAQs (updated 5/4/20) and the SBA Paycheck Protection Program Report: Second Round(new).
The IRS has issued new guidelines that concludes that expenses paid with PPP loan forgiven proceeds are not a tax deductible business expense. This reverses what would have likely been an unintended windfall to PPP loan borrowers in that they would be fully reimbursed for the subject expense, not have to pay income tax on that reimbursement and then get a write-off of that expense (which would essentially give the employer back 33% of that expense).
IRS clarifies eligibility for Employee Retention Tax Credit
Among the tax benefits available to businesses in the CARES Act is a fully refundable tax credit for eligible employers of up to $5,000 per employee for qualified wages paid to employees from March 13, 2020, to December 31, 2020. However, this credit—known as the employee retention tax credit (ERTC)—is not available to businesses that received a Paycheck Protection Program (PPP) loan. Click to read more
SBA guidance on employees who refuse to be rehired
Businesses with a Paycheck Protection Program (PPP) loan can exclude laid-off employees from loan forgiveness reduction calculations, if the employees turn down a written offer to be rehired. The guidance also warns that employees who reject offers of reemployment may find themselves ineligible to continue receiving unemployment benefits. See NADA's updated CARES ACT FAQs (question 40) and the Small Business Administration's PPP Guidance on Laid-Off Employees Who Refuse to Be Rehired.
RESOURCES
Click on the image (right) to visit our COVID-19 resource page on our website. As always, please send all questions and concerns toFADA here.
