On March 20, 2020, the Paycheck Protection Program (PPP) was established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and is overseen by the Small Business Administration (SBA). The CARES Act provides that an individual or entities who received a PPP covered loan can receive forgiveness of the full principal amount of the loan for payroll costs including employee’s tax liabilities, mortgage interest, rent obligations and utility payments on their business property during the SBA loan period. The CARES Act also provides that amounts that would otherwise be included in the gross income of the eligible recipient by reason of forgiveness of PPP loan amounts will be excluded from gross income on either the recipient’s individual or corporate tax return. It should be noted that these amounts are only excluded from Federal income taxes and not state income taxes.
DeSantis & Company has been assisting businesses with their tax accounting since 1992. As an extension of these services, we are helping clients apply for PPP loan forgiveness. The forgiveness protocol varies depending on the amount of the PPP loan. Those loans less than $150,000 regularly receive forgiveness in approximately a month. The PPP loans above $150,000, but under $2 million dollars, can take three to six months. PPP loans above $2 million dollars can take as long as a year from the time the documentation is sent from the originating bank to the SBA. DeSantis & Company can help navigate businesses through this process. Contact us about our tax accounting services.