Did you miss out on the first two opportunities to receive your tax-free Paycheck Protection Program (PPP) cash?
Many did miss out. Why?
One reason: the word “loan.”
Who wants a loan? No one. Well, almost no one
But who wants a cash gift, tax-free?
If you do, read on for the details. But first, you should know that the big picture works like this:
- You obtain your PPP tax-free monies from a lender (it’s called a “loan,” but watch that word disappear as you read this letter).
- You spend all the PPP money on yourself if you are self-employed or operate as a partnership; on payroll (including pay to you, if that applies); and on other covered expenses such as rent, interest, utilities, operations, property damage, suppliers, and worker protection.
- You apply for loan forgiveness and achieve 100 percent loan forgiveness, which is easy-peasy when you spend 60 percent or more of the money on payroll (and yourself if you are self-employed or a partner in a partnership).
- You deduct the expenses that you paid with the PPP loan monies that were forgiven.
New Money on the Table
The new COVID-19 stimulus act sets aside $35 billion for first-time PPP applicants, with $15 billion of that made in loans for first-time applicants with 10 employees or fewer or made in amounts less than $250,000 to businesses in low-income areas.
The new deadline of March 31, 2021, replaces the expired deadline of August 8, 2020.
The monies available in this new round of PPP funding are on a first-come, first-served basis. Don’t procrastinate. Get your application for your first-time PPP monies in place now.
If you would like to discuss the PPP, please call our office at 847-593-7558.