What You Should Know About the Consolidated Appropriations Act of 2021

We’re 13 days into 2021 and a lot has already happened. Chances are you haven’t processed the end of 2020. Congress recently pass the Consolidated Appropriations Act of 2021, the CAA is long, really long at over 5,500. We have put together some of the highlights that you need to know when it comes to business, in particular what’s new with the PPP for 2021.

Here are some of the takeaways

  • The definition of payroll cost officially includes group life, disability, vision, and dental insurance. The change to the definition is retroactive if you have not applied for forgiveness for PPP1.
  • There is a one-page loan forgiveness application for loans valued at $150,000 or less.
  • You may request a modification to the original PPP (PPP1) if you did not use the maximum amount of the loan.
  • The following expenses can be forgiven:

    • Payroll Cost
    • Covered mortgage, rent and utility payments
    • Covered operation expenditures
      • Includes software and cloud computing expenses related to HR and accounting.
    • Coverage property damage cost
      • Costs related to property damage due to public disturbances that occurred during 2020, not covered by insurance.
    • Covered supplier cost
      • Payments to a supplier pursuant to a contract/purchase order in effect prior to take out the PPP; if the expenditures were essential to the recipients operations at the time the expenditure was made.
    • Covered worker protection expenses
      • Cost to pay for PPE and other investments that would make your business compliant with government guidelines related to COVID-19 from March 1, 2020 to the end of the national emergency declaration.
    • The expenses that can be forgiven are retroactive if you have not yet applied for forgiveness for the original PPP.
    • You still must spend 60% of the loan on payroll cost to be eligible for forgiveness.
    • The CAA recently clarified that  business expenses may be deducted even if paid for with a PPP loan that is forgiven & excluded from income.
  •  

To apply and receive the new PPP you must have maxed out the original PPP. You must now have fewer than 300 employees and be able to show a 25% decrease in gross receipts in one quarter of 2020 compared to 2019 or a 25% from 2020 compared to 2019.

The CAA as it relates to the Families First Coronavirus Response Act

  • The mandate to provide employees with paid sick and, paid family and medical leave for certain reasons related to COVID-10 has expired.
  • It is now voluntary.
    • You can still provide the leave mentioned in the Families First Coronavirus Response Act to employees. If you provide the leave from FFCRA you the employer will be eligible for tax credit through 3/3/2021.
    • If your employee previously used leave in 2020 they are not currently eligible to use it in 2021.

 

First PPP Draw Details

Second PPP Draw Details

PPP Loans FAQs

3508EZ PPP Loan Forgiveness Application

See Title III- Continuing the Paycheck Protection Program and other Small Business Support

H.R. 133-812

The above is not intended legal or financial/accounting advice. The summary is not complete and is subject change. For questions you should reach out to your banker/accountant or one of the entities responsible for the PPP, FFCRA, or CAA.

 

Copyright 2021

Get to know Atlantic Payroll Partners

At Atlantic Payroll Partners we believe we are the best, local payroll provider to help you grow your business. Even more than that. We’re a Professional Employment Organization that offers an incredible suite of solutions for your business. In addition to offering payroll services we offer,

Our solution suite is back by over 100 years of combined experience in the PEO space.

We’re proud to say that we’ve helped businesses reduce employee turnover, increase revenue, make more money, and lighten their daily load by working with us. Our clients can offer their employees’ health care benefits, and access to the same 401k plans that the Fortune 500 companies use without breaking the bank.

We welcome you to continue exploring our website, to learn more about Atlantic Payroll Partners and how we can help improve your business. 

"Work Less, Fish More"

Paycheck Protection Program Forgiveness News

Paycheck Protection Program News

More Paycheck Protection Program news for your you to use.

According to a recent release from the Small Business Administration, borrowers can apply for forgiveness of their PPP loan using new SBA Form 3508S if the total PPP loan amount they received from their lender was $50,000 or less. “SBA Form 3508S requires fewer calculations and less documentation for eligible borrowers. Borrowers that use SBA Form 3508S are exempt from reductions in loan forgiveness amounts based on reductions in full-time equivalent (FTE) employees or in salaries or wages,” says the form instruction.

SBA Form 3508S doesn’t require borrowers to show the calculations used to determine their loan forgiveness amount. However, the SBA still may request information and documents to review those calculations.

According to an article in Forbes, the new rules “remove the need to show that the borrower did not reduce head count or salaries and, therefore, suffer a reduction in loan forgiveness.” The article noted that the SBA has justified the $50,000 threshold by pointing out that companies that borrowed such a small amount often had one employee at most. This made the head count rules largely moot.

Deadlines Later Than Thought

The Journal of Accountancy has also pointed out that loan forgiveness applications are not due on Oct. 31 as many had thought. This was a misunderstanding due to a date on the form. The JofA notes that “borrowers may submit a loan forgiveness application any time before the maturity date of the loan, which is either two or five years from the loan’s origination, depending on the borrower’s agreement.”

See the SBA site for more details. Check out our COVID-19 resources.

Copyright 2021

About Atlantic Payroll Partners

At Atlantic Payroll Partners we believe we are the best, local payroll provider to help you grow your business. Even more than that. We’re a professional employment organization that offers an incredible suite of solutions for your business. In addition to offering payroll services we offer, full-service HR, workers’ compensation, accounting, and health care benefits. Our solution suite is back by over 100 years of combined experience in the PEO space.

We’re proud to say that we’ve helped businesses reduce employee turnover, increase revenue, make more money, and lighten their daily load by working with us. Our clients can offer their employees’ health care benefits and access to the same 401k plans that the Fortune 500 companies use without breaking the bank.

We welcome you to continue exploring our website, to learn more about Atlantic Payroll Partners and how we can help improve your business. We do our job, so that you can focus on yours.

Paycheck Protection Program News

Update as of 11/2/2020 we’ve got some news on the forgiveness process that we’d like to share with you.

Paycheck Protection Program News Forgiveness

 

Paycheck Protection Program News

Procrastinators rejoice…

The Paycheck Protection Program loan, slated to end on June 30, will now accept applications until Aug. 8, thanks to a last-minute bill passed by Congress at the end of June.

The PPP was created to help business keep their employees on payroll during the COVID-19 pandemic. The loan may be forgiven if the business is able to meet the terms of agreement.

According to the Journal of Accountancy, by the end of June, the Small Business Administration had approved nearly 4.9 million loans totaling more than $520 billion. About $130 billion of the funds remain unused.

What else is new-ish…

At the beginning of June the Paycheck Protection Program Flexibility Act of 2020 was passed.  This Act updated the terms of the coverage period for the PPP loan from February 15th 2020 to December 31st 2020. The Paycheck Protection Program Flexibility Act of 2020 also updated the coverage period to use the loan from 8 weeks to 24 weeks. The covered period to use the loan depends on when you applied for the loan. Another key change is the spend amount for forgiveness. Previously, 75% of the cost had to go to payroll. Now 60% can be used for payroll and 40% can go toward mortgage obligations, covered rent, or covered utility payment. For more information please about the Paycheck Protection Plan Flexibility Act please read H.R. 7010.

About Atlantic Payroll Partners

At Atlantic Payroll Partners we believe we are the best, local payroll provider to help you grow your business. Even more than that. We’re a professional employment organization that offers an incredible suite of solutions for your business. In addition to offering payroll services we offer, full-service HR, workers’ compensation, accounting, and health care benefits. Our solution suite is back by over 100 years of combined experience in the PEO space.

We’re proud to say that we’ve helped businesses reduce employee turnover, increase revenue, make more money, and lighten their daily load by working with us. Our clients can offer their employees’ health care benefits and access to the same 401k plans that the Fortune 500 companies use without breaking the bank.

We welcome you to continue exploring our website, to learn more about Atlantic Payroll Partners and how we can help improve your business. We do our job, so that you can focus on yours.

Wondering why you didn’t get approved for the Paycheck Protection Plan?

Wondering why you didn’t get approved for the Paycheck Protection Plan?

You may have been one of the businesses that pounced on the hastily assembled Paycheck Protection Program in hopes of getting a loan. Many businesses succeeded, but some did not, and it’s not always clear why. If you didn’t, Wondering why you didn’t get approved for the paycheck protection plan here are some clues why.

Your first call should be to the lending institution. PPP loans don’t come directly from the Small Business Administration or another government agency, but from banks approved to work with the SBA. There is no universal portal to track your loan or uncover reasons for delays or rejections. Your contact at your bank or your bank’s own loan portal might be able to help you.

Also, here are some other items that might be holding you up, according to SmartAsset, a personal financial technology company.

Failure to document employee costs.

This error is especially common with sole proprietorships. Owners should make sure they are listing actual employees and not contract workers. If you don’t have any actual employees, you may still be OK — PPP loans are available for gig workers, sole proprietors and independent contractors. But you have to have your papers in order.

Franchise confusion. 

Franchised businesses are eligible for PPP loans but need to be in the SBA franchise directory. If you’re having trouble, make sure you’re on the list. If not, contact the SBA about how quickly you can get on it.

Failure to meet key qualifications. 

SmartAsset notes that if you were not in operation before Feb. 15, 2020, you won’t be considered. Also, businesses with a 20% owner with a prior felony conviction or guilty plea will be rejected.

Excluded businesses. 

Certain business classes were initially excluded, such as banks, investment companies, passive real estate investment companies and speculative trading firms, according to the National Law Review. But there is some gray area here: Some registered investment advisors, for example, were initially rejected, but found on reapplication they were accepted, according to Wealthmanagement.com. If you were rejected because your business class is excluded, you may have to have a conversation with the SBA if you believe you are in an acceptable group.

Concerned about your ability to accurately handle payroll in order to better your chance at loan forgiveness? Atlantic Payroll Partners can help, give us a call at 772-466-0440 to take the stress of payroll off your plate.

Copyright 2020

Get to know Atlantic Payroll Partners

At Atlantic Payroll Partners we believe we are the best, local payroll provider to help you grow your business. Even more than that. We’re a Professional Employment Organization that offers an incredible suite of solutions for your business. In addition to offering payroll services we offer,

Our solution suite is back by over 100 years of combined experience in the PEO space.

We’re proud to say that we’ve helped businesses reduce employee turnover, increase revenue, make more money, and lighten their daily load by working with us. Our clients can offer their employees’ health care benefits, and access to the same 401k plans that the Fortune 500 companies use without breaking the bank.

We welcome you to continue exploring our website, to learn more about Atlantic Payroll Partners and how we can help improve your business. 

"Work Less, Fish More"

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