It will be helpful to track this information on spreadsheets or through QuickBooks®. Congress passed a series of acts in an attempt to ease the economic burden placed on businesses caused by restrictions due to COVID-19. One of these, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, created the Paycheck Protection Program (PPP). This program allowed for eligible businesses throughout the country to apply and receive loans from essential qualifier lenders to continue to pay employees, even if those businesses reduced hours or were closed. Currently, we are entering the period where many of these businesses have spent their PPP loan funds and are needing to apply for forgiveness of these loans. PPP loans may also be used to refinance certain Economic Injury Disaster Loans (EIDL) where the borrower received funds from Jan. 31, 2020, to April 3, 2020.
Intuit QuickBooks Capital to Help Small Businesses Access Additional PPP Loans as SBA-Approved Lender
Paycheck Protection Program (PPP) loans offered within QuickBooks Capital may be made by Intuit Financing Inc. (d/b/a QuickBooks Capital) or by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC. Security Certification of the TurboTax Online application has been performed by C-Level Security. TurboTax Premium uncovers industry-specific deductions for more tax breaks.
- It will be helpful to track this information on spreadsheets or through QuickBooks®.
- Loan payments of principal and interest are deferred as long as you apply for forgiveness within 10 months after the last day of your Covered Period, although interest will continue to accrue during this period.
- After you apply for forgiveness, the SBA will notify your lender if your application has been denied in whole or in part, and will remit your full or partial forgiveness amount to your lender; your lender would then notify you when your first payment is due.
- Borrowers don’t have to use all the loan proceeds in the Loan Forgiveness Covered Period, but funds used after this period are not eligible for loan forgiveness.
- The loan amount available through QuickBooks Capital may therefore be lower than the amount for which you are qualified.
- As a direct lender, QuickBooks Capital is able to simplify, automate and expedite the PPP application and funding process.
No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research.
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For example, borrowers eligible to use the simplified application (Form 3508S) are required to submit fewer or no documents depending on their situation. All borrowers are required to retain certain supporting documents for 3-4 years. Work with your lender for a full list of documents you must retain to apply for forgiveness. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, a $900 billion relief package, was signed into law on Dec. 27, 2020. The law includes an additional $284.45 billion in funding for Paycheck Protection Program (PPP) loans to help small businesses. These loans were originally designed to cover 2.5 months of eligible payroll costs, but recipients were ultimately given six months to spend the funds on eligible payroll and non-payroll costs.
- The law creates a further simplified PPP loan forgiveness application for loans of $150,000 or less.
- QuickBooks Capital can assist applicants in determining eligibility and automating much of the application process.
- In the meantime, follow the loan forgiveness requirements and rehire any employees you may have laid off to improve your chances of having your PPP loan forgiven.
- Please refer to the latest guidance from SBA and Treasury to confirm current program rules.
PPP Loan Forgiveness
For example, salary, wage or headcount reductions during the loan forgiveness covered period may reduce the forgivable amount for some borrowers. Forgivable loan amounts paid to owner-employees with less than a 5% ownership stake in a C- intuit ppp loan or S-Corporation, self-employed individuals, or general partners are capped differently, in accordance with SBA rules. Please refer to SBA guidance for additional limits on owner compensation depending on your business type, as well as for additional details about what payroll costs are eligible for forgiveness. However, borrowers need to exclude Federal employment taxes imposed or withheld between Feb. 15, 2020, and Dec. 31, 2020, including the employee’s and employer’s share of FICA and Railroad Retirement Act taxes, and income taxes required to be withheld from employees. There are different documentation requirements relevant to each individual application.
Certain borrowers are also eligible to use a simplified EZ Loan Forgiveness Application when filing for forgiveness. Borrowers don’t have to use all the loan proceeds in the Loan Forgiveness Covered Period, but funds used after this period are not eligible for loan forgiveness. For tax purposes, the loan forgiveness amount is excluded from gross income, but forgiven expenses are not deductible. The Coronavirus Response and Relief Supplemental Appropriations Act of 2021, a $900 billion relief package, includes an additional $284.45 billion in Paycheck Protection Program (PPP) funding to help small businesses. In addition to providing funds for first-time borrowers, the new law provides small businesses with an opportunity to apply for a second PPP loan. Eligible QuickBooks customers can quickly apply for a second PPP loan within QuickBooks Capital’s automated PPP application experience, by leveraging their business data that’s already on the QuickBooks platform.
The loan amount available through QuickBooks Capital may therefore be lower than the amount for which you are qualified. Our lending partner, Cross River Bank may be able to assist you directly with a loan of more than $150,000 because they may use additional payroll expense periods and support calculations. As an SBA-approved PPP lender, QuickBooks Capital is committed to helping the smallest of small businesses quickly apply for federal relief. Over 15 million workers are paid through QuickBooks, and we are committed to helping small businesses keep their employees on payroll. The non-payroll uses listed above are ones that may be covered by loan forgiveness, but they are not the only allowable uses of a PPP loan. Only loan proceeds spent on covered uses during the Loan Forgiveness Covered Period following disbursement of your client’s PPP loan are eligible for forgiveness.
How to enter PPP loans and EIDL grants in Lacerte
Note that although your forgiveness application does not need to be filed until the maturity date of your loan, interest is accruing and you will be required to start making loan payments at the end of your Deferment Period. If you apply for forgiveness, your Deferment Period ends when the SBA remits forgiveness to your lender or notifies your lender that you are not eligible for forgiveness. If you do not file a loan forgiveness application, your Deferment Period ends approximately ten months after the conclusion of the maximum 24-week covered period, which begins on the date you receive your loan proceeds.
After you apply for forgiveness, the SBA will notify your lender if your application has been denied in whole or in part, and will remit your full or partial forgiveness amount to your lender; your lender would then notify you when your first payment is due. If the Deferment Period ends with an unforgiven balance on your loan, you must begin to make loan payments at that time. PPP loans have a 1% interest rate, and interest will continue to accrue during the Deferment Period.
If you’re a PPP loan recipient, you will submit a PPP loan forgiveness application to your lender or the lender servicing your PPP loan. Once you submit your complete application for forgiveness, the lender will have 60 days to accept or deny your application. PPP federal relief processing will initially be available for a subset of QuickBooks Online Payroll customers who will be able to begin applying as early as next week. QuickBooks Capital anticipates that, based on the average monthly payroll, this initial group of small businesses may be eligible for billions of dollars in PPP federal relief. QuickBooks will continue to expand the ability to apply to other customers as well in the coming days.
Last year, the average PPP loan size distributed by the SBA was $100,000, while the average QuickBooks Capital PPP loan was less than $40,000. Per SBA rules, the PPP loan amount is based on the number of employees on payroll. QuickBooks serves the small business and self employed market that has long been underserved by traditional lenders. There are 6 million small businesses across the U.S., with one in five American small businesses using QuickBooks Payroll. If you use your loan for payroll and benefits costs, interest on mortgages, rent and utilities, your loan is eligible for loan forgiveness and you must apply to receive forgiveness. Please refer to the latest guidance from SBA and Treasury to confirm current program rules and how they apply to your particular situation.
Each of the SBA-approved lenders do attempt to assist in the completion of the calculations from these worksheets, either through online or downloadable excel worksheets. However, much of the jargon used in the application portal makes it very difficult for non-accounting/financial persons to use these portals and forms. I have been contacted by numerous individuals on how to complete this schedule. 2 Second PPP loans are subject to additional eligibility requirements and criteria. The loan from 2020 was not forgiven evidently, but it is not taxable income since it is just a loan.
The new law also calls for a simpler loan forgiveness application for PPP loans of $150,000 or less. Therefore, we’re continuing to build our online forgiveness experience within QuickBooks Capital based on the latest guidance. The CRB application is for certain eligible QuickBooks customers who want to apply for a first-time PPP loan. It is also available to eligible QuickBooks customers seeking a second-time PPP loan and who don’t have an active Intuit payroll account or who don’t meet other QuickBooks Capital eligibility requirements. Eligible QuickBooks customers applying for a loan greater than $150,000 can also apply for a PPP loan through CRB. CRB was one of the key lenders that worked with QuickBooks Capital in funding PPP loans for our customers in 2020.
TURBOTAX ONLINE/MOBILE
Your LFCP generally begins on the date you received your loan proceeds from your lender, and ends on any date you choose between 8 and 24 weeks after your LFCP start date. If you’re a recipient of a PPP loan, you may apply for forgiveness and have all or part of your loan forgiven if you meet certain requirements. Many professionals might be of the mindset to provide only what is asked or even less.
If reductions made between February 15, 2020 and April 26, 2020 are reversed by December 31, 2020 (or by the last day of the LFCP for a PPP loan made on or after December 27, 2020), your loan forgiveness amount will not be reduced due to salary or wage reductions. Your loan forgiveness amount may be reduced if the average annual salary or average hourly wages for any employee during the LFCP are more than 25% lower as compared to the most recent full quarter during which the employee was employed before the LFCP. With the passage of the Coronavirus Response and Relief Supplemental Appropriations Act, there have been significant changes to the SBA’s PPP and select tax credits. We’ve updated Intuit Aid Assist, a free website with interactive tools to help eligible small business owners and the self-employed assess their eligibility for federal relief programs and related tax credits. Eligible non-payroll costs must be paid (or incurred and paid at the next regular billing date) during the Covered Period and cannot exceed 40% of the total forgiveness amount. The Paycheck Protection Program loan provides up to eight weeks of financial assistance to small businesses that maintain their payroll during the COVID-19 pandemic.
Consequently, you don’t necessarily need to amend your return for 2020 since your taxable income did not change. You can amend it if you want to change the amount of the tax-exempt income reported on line 16(b). QuickBooks lending expert Luke Voiles is available for media interviews to explain how the new PPP program can help small businesses, how to navigate forgiveness and answer other questions related to fintech lending. The amount of PPP loan forgiven and/or EIDL advance will be reported on Schedule K, line 16b, as other tax-exempt income. The amount of PPP loan forgiven and/or EIDL advance will be reported on Schedule K, line 18b, as other tax-exempt income. Department of the Treasury on the PPP are evolving rapidly and the information contained herein may be outdated.
Department of the Treasury on the PPP are evolving rapidly and the above information may be outdated. Please refer to the latest guidance from SBA and Treasury to confirm current program rules. The funding described in this email is made available to businesses located in the United States of America and are not available in other locations. Given the large demand for additional authorized Paycheck Protection Program funds, not every qualified Paycheck Protection Program applicant will receive a loan. Previous approval of a Paycheck Protection Program loan does not guarantee approval of a second PPP loan. QuickBooks Capital provides an easy to use, automated second PPP loan application process for certain eligible QuickBooks customers seeking a second PPP loan up to $150,000.
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