From my accountant today…offering SOME optimism:
Good Afternoon,
*It’s been a while since I’ve updated everyone because we’ve been waiting on guidance regarding forgiveness, which finally came out last Friday night and we had time to digest. The major change on this was the limit on owner’s compensation. Owner’s are only allowed to be credited 15.385% (8/52) of their 2019 compensation during their 8 week period. If you were paid over $100K in 2019 then it’s a non-issue for you. Some of us previously planned to bonus owners more than this limit so I wanted to make sure it gets out there and everyone just takes some time and let’s things develop.
This is because it now appears that Congress is going to extend the 8 week period to potentially 24 weeks. The House passed a bill yesterday doing just this but the Senate still has to pass it. However, it was a bipartisan bill so I’m hopeful it gets through, or at least the period gets doubled to 16 weeks. If this happens it of course changes things as many of you will reach 100% forgiveness with regular payroll. Presumably it will increase the amount that can be paid to owners and individual employees from a 15.385% limit that was based on 8 weeks, to either 30.769% (16/52) or 46.154% (24/52). This also equates to max credit for any employee ($15,385, $30,769, or $46,154 respectively). Again, none of this is permanent and much is still in flux. Here’s a link to a recent article updating you on this most recent legislation. https://www.nytimes.com/2020/05/28/us/politics/house-paycheck-protection-program-changes.html*
The point is that most of you have all of next week to decide on any final changes and should likely take that time to see what the Senate does. If it passes this bill then we should be patient to see what other developments come as we will have much more time to plan, which may not even be necessary for most. An application for forgiveness has been published on the Treasury website https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf. It is complicated and will be difficult to complete, and they are currently stating that you will be required to complete this application yourself and turn into your bank. Your bank will then be responsible for making the determination of whether you meet qualifications as stated in your application. There still has not been an announcement on when the applications will be due.
I wanted to update everyone so you were aware of the latest happenings and as always, I will be in touch with more pertinent info as it becomes available and needs to be shared. I wish this was more concrete and I could tell you exactly what to do but that’s just not how this process is working. Your patience is appreciated and as always, thank you for your continued business and support.