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Business Brief: CARES Act - Paycheck Protection Program

04.27.2020

In our new video series, Brown Smith Wallace Business Briefs, subject matter experts provide quick overviews of timely tax and business advisory topics. In our COVID-19 Edition, we help you better understand what the many laws and regulations surrounding the COVID-19 pandemic mean for you and your business.

Below are our latest Business Briefs featuring David Killion, Principal, Transaction Advisory Services, with answers to frequently asked questions surrounding the Paycheck Protection Program. 

Questions answered in Part One:

  • What are the terms of my loan?
  • Who will forgive the loan?
  • How long will forgiveness take to process?
  • How much of my loan will be forgiven?
  • When does the loan forgiveness period start?
  • How can I spend the loan proceeds?
  • Are there any limits to eligible expenses?
  • When should I request forgiveness?

Questions answered in Part Two:

  • What would cause a reduction in eligible forgiveness?
  • How do I calculate base period headcount?
  • How do I calculate base period payroll costs?
  • What if I made headcount or payroll reductions?
  • Do I have to employ the same headcount?
  • What if I have a balance left on my loan?

Questions answered in Part Three:

  • Should I maintain a separate account for loan proceeds?
  • How should I document loan uses?
  • What can I do to ensure I can spend 75% of my loan on the payroll component?

Questions answered in Part Four:

  • How do I record this loan on my financials?
  • How do I record the interest accrual?
  • When the loan is forgiven, how do I adjust financials?
  • What if I have a balance left on my loan?
  • Will the loan require financial statement disclosure?
  • What will my auditor need?
  • What should I record on my Federal tax return?
  • Will any states tax forgiveness?

Team

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