HSC CORONAVIRUS C
OMMUNICATION
Edition #23
June 4, 2020
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HSC COVID-19 Fast Response Team
We are here to help!
In these uncertain times with multimedia channels reporting conflicting and sometimes incorrect information, our firm is working to add clarity to this situation by providing new and verified information as it becomes available to us. We have also set up a
Coronavirus Resource Center on our website for ongoing information.
In addition, we have created the HSC COVID-19 Fast Response Team to serve our clients in addressing the difficult decisions they are being faced with on a daily basis. This dedicated multi-disciplinary team consists of our tax, payroll, HR, capital markets and accounting professionals.
If you have questions or would like to speak with this team please contact your HSC team member or Kyle Wininger, CPA, CICA, CVA, CFE at
kwininger@hsccpa.com.
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PPP Loan Forgiveness Changes Coming
The U.S. Senate passed the House version of Paycheck Protection Program (PPP) legislation Wednesday night, tripling the time allotted for small businesses and other PPP loan recipients to spend the funds and still qualify for forgiveness of the loans.
The bill passed in a unanimous voice vote hours after Wisconsin Sen. Ron Johnson initially blocked it. Among the key provisions is a change in the threshold for the amount of PPP funds required to be spent on payroll costs to qualify for forgiveness to 60% of the loan amount.
The Senate approval sends the House bill, called the
Paycheck Protection Flexibility Act, to President Donald Trump, who is expected to sign it.
Following is a summary of the legislation’s main points compiled by the AICPA:
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PPP borrowers can choose to extend the eight-week period to 24 weeks, or they can keep the original eight-week period. This flexibility is designed to make it easier for more borrowers to reach full, or almost full, forgiveness.
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The payroll expenditure requirement drops to 60% from 75% but is now a cliff, meaning that borrowers must spend at least 60% on payroll or none of the loan will be forgiven. Currently, a borrower is required to reduce the amount eligible for forgiveness if less than 75% of eligible funds are used for payroll costs, but forgiveness isn’t eliminated if the 75% threshold isn’t met.
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Borrowers can use the 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by
December 31, a change from the previous deadline of June 30.
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The legislation includes two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Previous guidance already allowed borrowers to exclude from those calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
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Borrowers now have five years to repay the loan instead of two. The interest rate remains at 1%.
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Borrowers can now defer the employer’s share of FICA payroll taxes for two years. Half of the payroll taxes will be due in 2021, with the rest due in 2022.
We expect many clarifcations and changes to the application form to be made by the SBA and US Treasury in the following weeks.
Adapted from article o
riginally published by Jeff Drew, Senior Editor, JofA.
For more information please contact Scott Touro, MBA at
stouro@hsccpa.com.
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Webinar - Tax Provisions Related to the CARES Act
Please join us for this presentation as we review business and individual
tax aspects of the CARES Act. Topics include:
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Impacts to business interest expense, qualified improvement property, NOL carrybacks, and AMT credits.
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Delay of tax filings and payments.
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Frequently asked questions regarding stimulus checks.
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Impacts to charitable contributions, excess loss limitations, student loans, and RMD’s.
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Payroll credits including employee retention, expanded FMLA, and emergency sick leave.
Date: Wednesday, June 17, 2020
Time: 11:00 ET/10:00 CT
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Harding, Shymanski & Company, P.S.C. is a public accounting firm with offices in Evansville, Indiana, and Louisville, Kentucky. We are one of the largest accounting firms in Southern Indiana and Kentucky, providing experienced professionals who look beyond the numbers to the heart of complex issues. Our clients range in size from small proprietorships to billion-dollar corporations, from closely-held and family-owned businesses to publicly traded firms, and span nearly every industry. They all have one thing in common: they count on our expertise to capitalize on their opportunities and make the best of their challenges.
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Evansville Office
21 SE Third Street
Suite 500
Evansville, IN 47708
(812) 464-9161
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Louisville Office
545 S Third Street
Suite 102
Louisville, KY 40202
(502) 584-4142
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As a reminder, you are receiving this email because you are a treasured client of Harding, Shymanski & Company, P.S.C. For more information on our company, please
visit our website.
Harding, Shymanski & Company, P.S.C
Office locations
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