What is the Paycheck Protection Program?


         On March 27, the Coronavirus Aid, Relief and Economic Security (CARES) Act was passed and signed into law. It is the largest financial support package in United States history and has over 800 pages detailing the relief that will be provided to Taxpayers and businesses. One area that is gaining interest is the Paycheck Protection Program (PPP).
          The goal of the PPP is to help businesses provide economic stability for their employees. This is done through federally backed loans, in partnership with the Small Business Administration (SBA), that are to be used for certain payroll expenses. This would include salary (for those who make less than $100,000/year), payment of state and local taxes on the salary, cost of vacation, medical, family, and sick leave, and the cost of health care benefits. It can also be used to pay rent and utilities. This loan is intended to cover costs from February 15 to June 30 and will be 2.5 times the amount of normal payroll costs.
          A key point about this program is that the SBA will forgive these loans if they are used for their intended purpose, used during the 8 week period, and if businesses keep their employees at the same salary. If the money is used for anything else, the loan must be repaid. The CARES Act is very detailed and we’ll share more insights in future posts.

Comments

Post a Comment

Popular posts from this blog

Early Results from Focused Efforts on High Income Tax Cheats

            Over the past year, the Internal Revenue Service ( IRS ) has used funding from the Inflation Reduction Act on audit activities for those who earn more than $1 million and have more than $250,000 in tax debt. In that time, the IRS collected $1 billion from the group that met these criteria. The increase in funding will allow for other goals to be reached as well.           More staff has been added and technology is being updated to provide better service to all taxpayers in the coming years. The IRS will now expand its enforcement activity to include complex partnerships, large corporations, and high-income high wealth individuals who do not file tax returns. In recent years the IRS was not consistent with enforcing tax rules in this area and had fallen behind in the ways some had gotten around their tax responsibilities. These new initiatives look to bridge that gap. If you are in need of t...
Read more

Protect Yourself from Threats

            When it comes to data security threats, the challenges never end. The tactics that criminals use continue to change, but there are some basic things to keep in mind. When it comes to mass email messages or texts, the goal is to get someone to click on a link to steal information or download malware. This is phishing or smishing. An update to this scam is called clone phishing. In this variation, a real email is copied and sent to the recipient again. This time it has an attachment with malicious software or a link to a website designed to steal your personal information.           We can never be too sure how the attack will present itself, but we can be prepared with security measures to protect ourselves. Stop and be aware of warning signs. Unexpected messages with urgent tones telling you to click or download something should be examined closely. Getting a repeated message from a trusted source w...
Read more

The IRS Focuses on High Income Tax Cheats

             The Internal Revenue Service ( IRS ) continues to focus on applying the tax laws with accuracy and fairness. With that in mind, they have announced that they are restarting a program that focuses on individuals who did not file returns from 2017 to 2021 and had at least $400,000 in income. They have identified at least 125,000 cases of people who are not in compliance.           The non-filer letters will be going out every week to start the process of filing returns, collecting taxes, interest, and penalties. The basis of these letters comes from information through Forms W2, 1099 and others. Those who receive letters of this nature need to take quick action. The enforcement actions in this program are stronger than usual. That makes it critical that those who receive these letters go to a qualified tax professional . The IRS can be made aware of qualifying deductions and credits that can ch...
Read more