The CARES Act authorizes up to $349 billion dollars in loans to small businesses for job retention and certain other expenses. The program is also known as Paycheck Protection Program (PPP). It is possible that much or all of the amounts borrowed can be forgiven under the program. The article will discuss the PPP in detail.
Businesses, non-profits, tribal businesses and veterans organizations with not more than 500 employees during covered period (February 15, 2020 – June 30, 2020) are eligible to apply the PPP loan. Individuals who operate as sole proprietors or as independent contractors and eligible self-employed individuals can also receive a loan. It will be necessary to provide documentation like a 1099-Misc or show income and expenses.
The maximum loan amount is the lesser of : (1) Average monthly total of payroll costs incurred during the one year period before the date on which the loan was made (for seasonal employers, use the average monthly payments for the 12-week period beginning February 15, 2019 or March 1, 2019, and ending June 30, 2019) multiplied by 2.5; or (2) $10,000,000.
You must use the PPP loan proceeds for payroll, costs related to the continuation of group health benefits during periods of paid sick, medical or family leave, and insurance premiums, employee salaries, commissions or similar compensation; interest payments on mortgages; rent; utilities; and interest on other debt incurred before the covered period.
To apply for the loan, the applicant must submit SBA Form 2483 (Paycheck Protection Program Application Form) and payroll documentation. The lender must submit SBA Form 2484 (Paycheck Protection Program Lender’s Application for 7(a) Loan Guaranty) electronically in accordance with program requirements and maintain the forms and supporting documentation in its files.
In general, if the employer maintains the workforce, the SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks (covered period) of payroll and certain other expenses following loan origination. To meet the forgiveness requirement, at least 75% of the loan proceeds must be spent on payroll during the 8-week period. Not more than 25% of the forgiveness can be attributable to non-payroll costs (e.g., mortgage, utilities and rent).
Disclaimer
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
Job descriptions primarily emphasize the specific tasks associated with a role, while position success profiles concentrate on the key outcomes that are critical for success in that role. Furthermore, a position success profile encompasses the essential core competencies required to achieve the desired outcomes associated with the position.
Cancellation of debt (COD) refers to the act of a creditor releasing a borrower from a debt obligation to repay a debt. Taxpayers in the United States may face tax implications when debt is cancelled, a situation referred to as cancellation-of-debt (COD) income. As per the Internal Revenue Code, the discharge of indebtedness must be included in a taxpayer's gross income.
All companies registered in the United States are generally required to file federal income tax and state income tax, which are generally related to the company's business net income in the state. Therefore, people often mistakenly believe that if a company has operating losses or no operating income, it does not need to pay taxes.
In the United States, the dynamics of employment—including the nature of work, the locations of work, the composition of work teams, the motivations for work, and the technologies employed—are subject to ongoing transformation. Many of these shifts began before the onset of the pandemic, were expedited by it, and have since become enduring features of the workplace environment. Human Resources
