At The Harding Group, we are diligent about staying informed on the ever-evolving list of COVID-19 relief programs. Every week brings new developments that affect our clients and their businesses. This week saw a few new updates in COVID-19 relief programs, which we outline below.
PPP Loan Program Funding
Another round of funding for the COVID-19 relief program, the Paycheck Protection Program, has been allocated at about $310 billion. As always, we suggest you apply as soon as possible as these applications are time-sensitive. Additionally, you must be very wary of online scams! Many fake websites are cropping up that allege to help you get grants or stimulus checks.
Federal Stimulus Checks for Individuals
The $1,200 stimulus checks have been delivered to some people, but some individuals are still waiting for theirs to arrive. You can find extensive information about the COVID-19 relief stimulus checks at the IRS website here.
Additionally, if your last tax return didn’t have your bank info on it, you can enter your bank info through “Get My Payment” on the IRS website to get your payment faster. If you need to enter your address, it is recommended that you enter your address in all capital letters.
Finally, if you weren’t required to file a return because of your income level, you can go to the Non-Filers: Enter Payment Info Here link.
MD Unemployment Benefits for Self-Employed Individuals
As of last Friday, April 24th, MD Unemployment launched a new website to facilitate accepting applications for self-employed people. However, they are still overwhelmed by the volume of applications. So, again, we recommend that you stay persistent and patient and keep trying! You can access their website here, but you will likely have a significant wait time.
If you have already applied for unemployment, or have any further questions, you can find information here.
What To Do With PPP Loan Proceeds
If you have been approved for the PPP Covid-19 relief loan, you should be prepared for the moment those funds hit your bank account. We suggest coding it to a liability account on your balance sheet, and leave it there until it has been officially forgiven. Then, you can move the forgiven amount to the profit and loss statement as non-taxable other income.
If you are wondering how much of the PPP loan will be forgiven, so far, we have the following information. Expenses for the following items in the eight weeks following receipt of the funds will be forgiven:
- Gross wages
- Employer payroll taxes
- Employer health insurance expense
- Mortgage interest incurred in the ordinary course of business
But it should be noted that not more than 25% of the forgiven amount can be for non-payroll costs. Additionally, even if you use the money for the approved expenses, forgiveness could be reduced if there is a reduction in the number of employees or a decrease in wages greater than 25%. The US Chamber’s PPP brochure has some more information here.
Harding Group Payroll Clients
There are three COVID-19 relief stimulus programs in play currently that we can help our payroll clients with, but only if you contact us and inform us of what is going on. These programs include:
- Families First: let us know if you are paying for an employee who is sick or quarantined, caring for someone sick/quarantined, or caring for a child due to school or childcare closure.
- FICA Deferral: Let us know if you would like us to defer your employer portion of FICA. This isn’t available if you get a PPP loan, but otherwise, you can elect to defer it through the end of the year and pay half 12/31/21 and the other half 12/31/22.
- Employee Retention Credit: To qualify for this credit, your 1st quarter 2020 gross revenue must be less than 50% of your 1st quarter 2019 gross wages. This isn’t available if you get a PPP loan, but if you think you qualify, contact us.
Extended MD Deadlines
The following MD taxes were extended until June 1st, and have now been extended further to July 15th:
- Sales Tax, ordinarily due in February, March, April, or May
- MD Withholding, ordinarily due in February, March, April, or May
If the Harding Group prepares your payroll or sales tax, please let us know if you would like us to delay your tax payments!
trust the professionals at the harding group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for emails or phone calls and will strive for open communication with our clients. Whether you are interested in business advising, tax preparation, bookkeeping and accounting, payroll services, Training + support for QuickBooks, or retirement planning, we have the expertise and years of experience to help. We serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of taxes, contact us online or give us a call at (410) 573-9991 for a free consultation. For more tax tips, follow us on Facebook, Twitter, YouTube, and LinkedIn.