Follow Caroline Linkedin Facebook
Email Caroline Email
Financial
Oct 9, 2020

Paycheck Protection Program (PPP) Update

Sponsored Content provided by Caroline Montgomery - Tax Manager, Partner, Adam Shay CPA, PLLC

We have received questions about when people should apply for PPP Forgiveness and whether forgiveness applications are being processed. As with everything in our world, that answer begins with “it depends”. For starters, some lenders are accepting applications for forgiveness and others are not or only doing so for a small subset of their clients.
 
On October 8th, the Small Business Administration (SBA) released a simplified forgiveness process for loans of less than $50,000. Note, there was hope that this would be automatic forgiveness but this simplified application is not that. This simplified application has an expiration date of 10/31/2020. It remains to be seen what that means.

Banks will most likely be excited to get these simplified applications processed as they won’t require as much work on their end. Forgiveness applications with greater than $50,000 dollar amounts will be more complex and we really recommend that you work with a CPA firm to make sure that your forgiveness process goes smoothly. Doing so can help ensure that if you qualify, your entire loan amount is forgiven. Indications from bankers are that they want CPAs involved in order for the forgiveness applications to be cleaner on their end. In short, having a CPA involved will make the overall process smoother and simpler in many ways.

There is still some, maybe even false, hope that the SBA will simplify the forgiveness process (even with a simpler form or automatic forgiveness) for loans with even higher dollar amounts ($150,000 figure has been floated). As a result, some people are recommending waiting to apply for forgiveness. However, we believe that the $50,000 figure is the floor they are setting.
 
How does PPP forgiveness work? Lenders have 60 days to review a PPP forgiveness application after it is submitted. Once the bank completes its review and passes the application on to the SBA, the SBA then has an additional 90 days to evaluate it. Remember that at this time if all or some of your PPP loan is forgiven, the expenses used for forgiveness are no longer tax deductible.

IRS Update

The IRS is still digging out from their COVID-19 mail backlog. Currently, their backlog of mail is down to 5 million pieces (it was 11 million in June). They get approximately 1 million pieces of mail a week. As a result of their delay in processing mail, incorrect notices are being sent out for information that they have but don’t know they have.

How do you operate in this environment? Our recommendations are no different than normal times – submit everything electronically to the IRS that you can. If you receive a notice, get assistance in responding. Know that resolving tax notices can take time, even under normal circumstances. The IRS is being more lenient with penalties if the taxpayer can show that the issue arose due to the COVID-19 pandemic.
 

Caroline Montgomery, CPA (NC License Number 39017), MSA, is tax manager and partner of Adam Shay CPA, PLLC. The most rewarding part of what she does is helping business owners and individuals achieve their goals, all while working with a dynamic team that is growing quickly. The firm focuses on a proactive approach by encouraging clients to minimize taxes via income tax planning and projections, or by focusing on other areas of their business as part of the firm's Virtual CFO services. The firm also offers tax preparation, fraud and forensic accounting and tax issue resolution services. She moved to Wilmington in 2014 and started at the firm in 2015. Caroline graduated with her her undergraduate and graduate degree in 2010 from East Carolina University. She is actively involved with NourishNC as their Treasurer and enjoys volunteering with various organizations throughout New Hanover County. In her free time, Caroline enjoys spending time with her husband, Mike, and dog, Mason, as well as travelling and going to the beach.

Adam shay blk 52015121549 61219103751
Ico insights

INSIGHTS

SPONSORS' CONTENT
Mike stonestreet 300x300

Got Compliance? If Not, Here Are Some Best Practices On Handling Community Association Violations

Mike Stonestreet - CAMS (Community Association Management Services)
Junegunter teachinghorse headshot 5721115557

Find Your Herd

June Gunter - TeachingHorse
Burrus rob headshot 300x300

Economic Recovery As COVID Wanes

Robert Burrus - Cameron School of Business - UNC-Wilmington

Trending News

TRU Colors Investor Molson Coors Responds To Weekend Homicide

Christina Haley O'Neal - Jul 26, 2021

Monteith Construction, Live Oak Bank Among Business Partners In New 1897 Initiative

Christina Haley O'Neal - Jul 27, 2021

New Restaurant Opening Soon On Masonboro Loop Road

Jessica Maurer - Jul 28, 2021

UNCW's Swain Center Moving To New College Road Location

Christina Haley O'Neal - Jul 26, 2021

WMPO Turns Down Cape Fear Toll Bridge Proposal

Christina Haley O'Neal - Jul 28, 2021

In The Current Issue

Generating Privacy And Leads

Wilmington-based Reignlist launched a new platform last month that aims to deliver solutions to how information is shared within other real...


The Muni: 'A Peach Of A Course'

Golf Magazine recently named the Wilmington Municipal Golf Course the best public course in North Carolina and No. 21 of the top 30 municipa...


Taking Stock Of Ncino, Live Oak

Over the past year, the stock prices of Wilmington’s two public fintech companies have followed opposite trajectories....

Book On Business

The 2021 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Trying to Grow a Business?
2020 Health Care Heroes
2020 WilmingtonBiz 100