Articles related to the COVID-19 crisis

Helpful Links Related to COVID-19

Even before this strange season we find ourselves in, KuberneoCPA has sought to provide assistance and helpful resources to our clients. When the COVID-19 crisis first began, we quickly established our resource center. As the volume of resources has grown, we thought it might be useful to aggregate a few of the links we’ve shared over the past several months into one post for quick and easy reference.

You might also want to check out some of our more popular posts:

We will continue to post new articles and updates at our resource center. And as always, please contact us if you have questions, concerns, or just want to talk through an issue. Our KuberneoCPA team is ready to help!

Fintech Companies Provide PPP Loan Options

As a small business ourselves, we understand many of the the difficulties COVID-19 has presented, many of which are financial. Gratefully, the government’s response to the coronavirus pandemic has included providing financial aid to small businesses. One of the most well-known and highly-utilized mechanisms is the Payroll Protection Program (PPP), which helps small businesses secure loans through the Small Business Administration (SBA) to keep its workers employed. Best of all, most or all of the loan proceeds are forgivable, meaning the loans will not require repayment!

Originally, the only lenders offering access to PPP loans were traditional banks. Unfortunately, many small businesses did not have an established lending relationship with a large bank, community bank, or credit union. Many traditional banks reserved their lending efforts to their existing customers, leaving a large number of small businesses unserved or underserved.

Enter Fintech. Fintech (financial technology) companies have now also been approved by the SBA to accept applications from small businesses as part of the PPP. This offers new opportunities for small businesses who have not yet been able to access PPP funds.

Below are links to several fintech companies offering PPP loans to small businesses. We are providing these solely as a reference, specifically for any clients who have not had success with traditional banks or who prefer more innovative solutions.

As always, if you need help completing gathering the information needed to prepare your application, or if you just want a sounding board or affirmation as you go through the process, our KuberneoCPA team is ready to help! Contact us today to schedule a consultation and let us assist you.

New PPP Forgiveness Forms

The Departement of Treasury and the Small Business Administration (SBA) this week announced a revised, borrower-friendly simplified loan forgiveness application form to supplement the more robust (and complicated) Form 3508. This is good news for smaller borrowers, as it greatly simplifies the application process and potentially increases the likelihood of full loan forgiveness.

The new “EZ” version of the forgiveness application applies to borrowers that:

  • Are self-employed and have no employees; OR
  • Did not reduce the salaries or wages of their employees by 25%, and did not reduce the number or hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.

The revised EZ forgiveness application requires less documentation and fewer calculations for eligible borrowers. Details can be found in the instructions to the new form.

Both the full and EZ applications give borrowers the option of using the original 8-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period. These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.

We’ve also heard from our clients that many banks are creating customized electronic versions of the forgiveness application forms that will work seamlessly with the banks’ existing online systems.

For your reference, links to the two forms are provided below:

PPP Loan Forgiveness Application 3508 EZ Form

PPP Loan Forgiveness Application Full Form 3508

The legislation is still developing, so we will continue to monitor the forgiveness process and post updates from time to time. Check back often and be on the lookout, too, for guidance issued directly by your lender.

As always, if you need any help navigating this ever-changing environment, the KuberneoCPA Team is available to you. Contact us to discuss your particular situation, and we will walk beside you every step of the way!

 

New Safe Harbor Deadline to Return PPP Funds

The U.S. Small Business Administration (SBA) has extended the “safe harbor” deadline to return unqualified PPP funds to May 14. That means companies can return the funds before that date without penalty. If your organization received a Paycheck Protection Program (PPP) loan and you have now determined that you don’t meet the requirements for “economic uncertainty,” this is your opportunity to return the funds without incident. In other words, SBA guidance and regulations provide that any borrower who applied for a PPP loan prior to April 24, 2020 and repays the loan in full by May 14, 2020 (previously May 7) will be deemed by SBA to have made the required certification in good faith.

Specifically, before submitting a PPP application, the SBA instructs all borrowers to review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification

All indicators point to the fact that the PPP was intended for smaller businesses hardest hit by COVID-19. However, the money available to borrow ran out very quickly. Officials discovered that large companies received tens of millions of dollars in relief—despite their relative stability. The SBA has therefore indicated that they will audit all borrowers who receive funding of $2 million or more. This is an apparent response to the backlash of larger and more financially secure companies receiving PPP funds during the initial loans, to the exclusion and detriment of smaller organizations with a greater need.

The PPP has since been infused with an additional $310 billion, along with new safeguards and areas of scrutiny.

If you’ve received a PPP loan, we recommend that you scrutinize your situation to make sure you qualify for the funds, that is, your “ability to access other sources of liquidity sufficient to support [your] ongoing operations in a manner that is not significantly detrimental to the business.” You should return any unqualified PPP funds you have received during the safe harbor window to avoid penalties.

Even if you do not deem it necessary to return the funds, you should still document thoroughly the purpose of your loan and the specific use of your loan proceeds. Track how you’re spending these funds, particularly those amounts spent on the items originally intended to be covered by the PPP (including the number of employees and their respective compensation).

We will continue to post the latest developments and resources to our COVID-19 Resource Center, so please check back often!

PPP and EIDL Funds Replenished

On April 23, 2020, Congress passed the Paycheck Protection Program and Health Care Enhancement Act. This bill allocates a combined $370 billion of additional funding for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs to assist businesses affected by the economic impacts of COVID-19.

It is widely assumed that these newly approved funds will once again deplete very quickly, so we urge you to be in contact with your preferred lender as soon as possible to initiate the application process. Please contact us with any questions regarding support for your loan application(s) and how best to allocate your funds and track your spending.

KuberneoCPA will continue to monitor the U.S. government response to the COVID-19 pandemic and other actions to keep you as informed as possible. We will continue to post updates on our COVID-19 Resource Center so check back often!

 

UPDATED 5/22/2020–Where’s My Stimulus Payment??

Most Recent Update – 5/22/2020

The IRS has announced that some stimulus payments may be sent on a prepaid debit card known as The Economic Impact Payment Card instead of paper checks.

If you receive an Economic Impact Payment Card, it will arrive in a plain envelope from “Money Network Cardholder Services.” The Visa name will appear on the front of the Card; the back of the Card has the name of the issuing bank, MetaBank®, N.A.

The IRS began distributing economic stimulus payments in April via direct deposit to taxpayers who had up-to-date information on file. It followed up with payments by paper check starting in mid-May. However, the agency estimated it might take as long as four to five months to mail out the millions of remaining checks. Now it says that sending four million prepaid debit cards will cut down on the time.

Some are viewing the use of the EIP cards as a test for future stimulus payments, if any are forthcoming. If all goes well, this might be a simpler and faster approach to distributing money to taxpayers.

Additional Updates

  • The IRS website was improved recently and is reportedly functioning better.
  • If you get the “payment status is unavailable” message, try again the next day. (It is being updated every 24 hours.)
  • Whether or not you’ve filed 2019 does not affect the “payment status is unavailable” message.
    • We have seen instances with clients, both filed and not filed for 2019, who have gotten the results and non-results message.
  • Taxpayer name and address must EXACTLY match your last tax return filing, including abbreviations for St vs Street, etc.
  • We recommend using all caps. It has actually changed the response for some.

UPDATE

The IRS started the process of sending stimulus monies via direct deposit. It is not immediate and not everyone will get their electronic deposit at the same time. Our KuberneoCPA team has no insights nor ability to see the IRS processing system, but the IRS has created a system for you to check on it, which you can find here.

Don’t be dismayed if the system says “Payment Status Not Available.” There are a number of reasons that may happen and does not necessarily mean you will not get a payment.

Unfortunately, the IRS system is not without problems. When utilizing that system, many taxpayers are getting the response: your information cannot be found. That response does NOT necessarily mean you don’t have a payment in process. If you have not received a direct deposit and want to check on it, we recommend checking the site once each day. (It is only updated once every 24 hours–overnight–so there’s no need to check back more frequently.)

In certain cases, however, the Get My Payment app will be unable to tell you the status of your payment. You may receive this message for one of the following reasons:

  • If you are not eligible for a payment (see IRS.gov on who is eligible and who is not eligible)
  • If you are required to file a tax return and have not filed in tax year 2018 or 2019.
  • If you recently filed your return or provided information through Non-Filers: Enter Your Payment Info on IRS.gov. Your payment status will be updated when processing is completed.
  • If you are a SSA or RRB Form 1099 recipient, SSI or VA benefit recipient – the IRS is working with your agency to issue your payment; your information is not available in this app yet.

Finally, the IRS will mail paper checks on or around April 30th, and letters with specific details about your payment.


Today’s biggest FAQ: Where’s my stimulus payment?

Well, we have some good news…

Stimulus payments are now in process!

You can track the status of your payment or enter your direct deposit information directly on this page on the IRS website.

If you want to know more about the program, including how much you may be eligible to receive, you can find that information on this page.

Have other questions? Read more FAQs about the COVID-19 crisis. If you don’t find what you’re looking for, ask us!

Extended Deadlines and Other Updates

Normally at this time, we’d be sending our clients a reminder that taxes are due. Instead, we have announcements about extended deadlines and loans to help bridge the gap during this unique time.

Extended deadlines

The new relief, issued by the IRS in Notice 2020-23, applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, including individuals, trusts, estates, corporations, and other non-corporate tax filers. That period will be disregarded by the IRS in calculating any interest, penalty, or addition to tax for failure to file the forms specified in the notice.

PPP – Payroll Protection Program

If you missed our introduction to the Payroll Protection Program (PPP), you can find it here. Applications ARE still being accepted and new lenders are joining the existing banks in the program. If you have employees and are having difficulty meeting payroll needs, this might be the program for you.

EIDL – Economic Injury Disaster Loans

According to the SBA website, the maximum loan amount is $2 million per business with a smaller initial grant possible ($1,000 per employee maximum, up to $10,000). So, a business with three employees, for example, would be eligible to receive only $3,000 up front, as opposed to the originally stated $10,000. On the bright side, funds ARE starting to be released.

KuberneoCPA: FAQ’s and Clients Only Video Chat

New information is being released and updated daily, sometimes hourly, regarding assistance programs and how to qualify for each. We have created a resource page on our KuberneoCPA website specifically to share this information with you. We’ll be sharing government links as well as advice and encouragement.

If you prefer an interactive video chat, you’re in luck! We will be hosting a video chat FOR CLIENTS ONLY this week on Wednesday afternoon at 2:30PM Eastern time. Our focus will be on the PPP and EIDL as well as the process to apply for each. Contact us to request an invitation.

NEW Resource – Main Street Lending Program

Previously announced programs may not have met all of your business needs. If this is you, the Treasury and the Federal Reserve announced a new program. You can find all the details in the Federal Reserve announcement.

Highlights of the Main Street Lending Program:

  • Business has not received adequate economic relief in the form of loans or loan guarantees under the CARES Act.
  • No minimum number of employees for borrowers.
  • Business must have been in good standing before the crisis.
  • Minimum loan amount $1 million

EIDL Loan advances will start to be distributed this week

We recently posted about the Payroll Protection Program (PPP). Its predecessor, the Economic Injury Disaster Loan (EIDL), offers similar but perhaps broader benefits, in the form of a loan. They work hand in hand.

And the best news, EIDL Loan advances/distributions are expected to start this week!

Originally, announcements and guidance seemed to indicate that the first $10,000 would be treated as a grant. As it turns out, the grant is limited to $1,000 per employee up to $10,000 max. And whatever amount is granted will reduce the amount of loan forgiveness under the PPP.

Other Coronavirus relief options from the SBA are detailed here.

Stay up to date by checking our Resource Page often. And let us know how we can help you!

Now Available – COVID-19 Resource Page

It’s a new week and we have new resources for you as well as some updates from last week.

NEW Resource – KuberneoCPA website: COVID-19

New information is being released and updated daily, sometimes hourly, regarding assistance programs and how to qualify for each. We have created a COVID-19 resource page on our KuberneoCPA website specifically to share this information with you. We’ll be sharing government links as well as advice and encouragement. It will also include FAQ’s and SAQ’s. Have you heard the saying, “You don’t know what you don’t know?” That’s why we have SAQ’s – Questions you should ask but don’t realize yet! Of course, if you have questions that are NOT answered on the site, someone else probably does as well. We’d love to hear them!

SUBMIT A QUESTION

Payroll Protection Program

If you missed our introduction to the Payroll Protection Program (PPP) last week, you can find it here.

Current highlights and updates:

  • All businesses with 500 or fewer employees can apply – including nonprofits, veterans organizations, sole proprietorships, self-employed individuals, and independent contractors.

WHEN can I apply?

  • If you pay employees via W2, applications are being accepted NOW.
  • If you are an independent contractor, sole proprietorship without employees or self-employed, the planned start date is Friday, April 10th for lenders to begin receiving applications.

WHEN is the deadline?

  • The deadline for applications is June 30, 2020. However, there is no guarantee funds will still be available at that time. We encourage you to apply as quickly as possible.

Can you help me apply?

  • YES! We can help, but we can’t apply for you. Per government regulations, KuberneoCPA cannot apply for a loan on your behalf nor can we prepare your loan application. However, we CAN perform research and prepare documents that you will need to apply for the loan to make the process easier for you. And, we can also perform analysis and prepare the documents you will need to submit later to request loan forgiveness. (If you are interested in this service, contact us by clicking HERE.)
  • If you currently have employees and want to apply for the PPP, contact your banker now and ask if they are accepting applications for the PPP loans. You can ONLY apply through an existing SBA lender.