AICPA Challenges – PPP Rules for Forgiveness

HARDESTY TIP
There are many challenges to the PPP rules.  Since each bank will determine how the rules are applied, it is important to have the most current information when your forgiveness amount is calculated.  The latest to challenge these rules is the AICPA.

Some companies cannot rebound in 8 weeks

AICPA Challenge

Forgiveness Calculation
  • The 8-week period should align with a pay period not the loan funding date
  • The 8-week period should be flexible
  • Full-time equivalents (FTEs) should be calculated using a simple wage-based proxy when hours worked are not tracked by the employer (e.g. salary workers)
  • Payroll reduction calculations should be based on an employee’s average payroll in the 8-week period compared to the prior quarter

The AICPA urged the Treasury to “….define the origination date as the date on which a state’s shelter in place order is lifted and businesses are authorized to return to full operations.”

Tax Deductibility
Furthermore, the AICPA noted that it”… believes the intent of the CARES Act was to allow businesses to deduct all of their ordinary and necessary expenses – including any expenses used to determine PPP covered costs…”  The AICPA will seek legislative clarification.

 

HARDESTY SUPPORT

As a service to our clients and network – reach out to Hardesty with your questions.

If you need more help than that, contact Hardesty today and we can help you with Fractional CFO support to:

  • Review your forgiveness plan
  • Communicate with your bank
  • Maximize your forgiveness amount
  • Help the company emerge stronger