My very important question. I’ve been reading a lot...what if I take 2nd. PPP loan but I didn’t get a 25% reduction in whatever documents I need (which I probably don’t have since I was a driver and I don’t keep that good of a record), and don’t ask for forgiveness and just pay for it? Is that possible?
Great info. Thanks Clara for sharing. We got the PPP late in May and most of employees have been on unemployment and lockdown in California is still in force for our business, not clear how we would spend the money correctly within 8 weeks for forgiveness. I heard your answers a little here and there throughout. Appreciate your thoughts on this. Thank you
Regarding current payroll costs vs payroll costs we applied with (2019 Schedule C) If we have averaged more income leading up to the month we received the PPP loan, then our average payroll would be higher than what we applied with. Should we increase the Owner Compensation Replacement accordingly?
Thanks for these answers. I have some question. If a company gets a PPP loan funded into their bank account on say April 21st. Is this correct, they have to spend at least 75 percent of the loan in the next 8 weeks on payroll, so they have until June 16th to spend at least 75 percent of the loan on payroll and the other funds for rent and utilities (we will skip interest). April 21 - loan funded April 28 (7 days), May 5 (14 days), May 12th (21 days) ,May 19 (28 days) May 26, (35 days) June 2, (42 days) June 9 (49 days) June 16 (56 days = 8 weeks) If the company has say 20 employees on February 15th and during the April 21st to June 16th period they have 20 and the payroll expense is say 80% of the ppp loan and rent is the other 20% and the total amount spent exceeds or is the same as the PPP loan, what does the company do? Do they contact the bank on say June 17th or 18th and say we want to have the loan forgiven and bring documentation to the bank? Does June 30th play any role if the company is not seasonal?
What happens if we overestimated our payroll (due to bonuses in December) so our loan amount is a little higher therefore our payroll costs might not meet 75%. What will happen if we don't meet the 75%? Thanks for your videos. So helpful!
@@charlesharvey6184 Yes, every other update makes it sounds if you do that then fraud, scaring us. Look, these loans took little care about utilities and rents Payroll Payroll Payroll but without utilities on and rents paid there is no business. Sure cover payroll for 2 months but after that guess, cut hours and people then they go on unemployment. Bank said if you listed 7;employees you have to keep 7. Why? If 5 return then give those hours to those 5. Same wages? If we reopen and a part timer works additional hours than before, well good for them. They also say owners cannot really pay themselves now. My wife too little pay for months to keep things going, well the last year too. We got bills as well. So if she was to actually write herself a paycheck from the S corp and a draw from the Sole P, that is frowned on. Just turn these into an emergency SBA loan and let owners decide what and how to spend it. That is what we need. I mean when they stipulate funding date forward 56;days doesn't help when the government forced you to shut down for 1-2 months so now you have those months of rent and utilities to catch up on. Few companies offer businesses any protection unlike residential companies, no check turn it off. Rents? They want money or evict or 3 day pay or vacate. Yes, can use the income not going to payroll to pay bills, providing business returns to normal. I wonder if she wants to pay me and her more, can we issue us payroll or draw from our own business accts not using the PPP loan money?
My normally full-time employees are currently working only 24 hours per week. If my employee headcount does not decrease, and I spend more than 75% of the PPP money on payroll, am I required to increase employee hours to full-time in order to qualify for loan forgiveness? Does having employees receive Partial Unemployment for their reduced pay during the PPP 8-week period effect my PPP loan forgiveness?
Q - if employees are unwilling to come back to work and/or can't find new employees, can I just use 25% of PPP on rent and return the rest (75%) after 8 weeks? And have the 25% be forgivable?
I have this question as well. One bank said they would do this unless SBA came back with a different interpretation. However reading the law I would say it's prorated so with zero enployees it might be zero rent forgiveness. So I am also confused. Also I believe that eidl needs to be applied first to business costs such as rent before the PPP 25% can count towards that.
My business is closed but we hope to reopen by beginning of June if the Governor allows. I have applied for and signed for the PPP (no money given yet). We are seasonal business and we would normally have opened at the end of March. Does it make any sense to take the money and hold onto it until we open. Then use it for payroll and utilities. Knowing that we will not come close to spending 75% of what we did in 2nd Quarter of 2019? Does it make sense to get some forgiveness rather than nothing? It seems a big gamble to me to pay employees who are not even here (many of our employees come to the area just to work for us- think outdoor adventure). What if I screw it up and I don't get forgiveness? But I could certainly use the help in June when we open. And I desperately need help with utilities. I applied for EIDL but never heard anything. That would have been more ideal but I think they are out of money. Feeling like I should take what I can get, 50% off payroll is better than nothing.
although i can't give you specific guidance on this, I definitely hear your concerns. It does seem like a gamble. You could take the funds and not spend them until you have more guidance on open dates and forgiveness limits. Worst case scenario, you could hold onto the money for a few months and pay it back if you realize you don't want to use it at all. You would be out the 1% annual interest rate, but could be worth having just in case!
Our company provides services to homes and businesses, therefore each employee either has a company truck or the ones that perform inspections only may use their own vehicle. Do fuel costs meet the definition of utilities in this sense, or reimbursement at the standard mileage rate for those using their own vehicles?
I closed my business on 3/18, and I have been paying my staff instead of furloughed them. If I get my PPP this round, can I claim what I’ve been paying my staff before? If not, can I claim the employment retention tax credit (since it’s not in the same time period). Thank you so much for all the helpful information.
Thanks for the information. I only kept one employee for the past 6 weeks and last week brought back employees at half of their hours, keeping the initial employee working the rest of their hours as well. I would like to give her a pay increase with the PPP loan for covering all shifts of our small business during these past 8 weeks as well as the covered period until our business is back to normal. Is this allowed? I am reading about "incentive pay" and questions regarding increasing pay for employees working more while operating in a limited manner, but nothing really directly answering that question.
Great information Hannah! My question is also around business owner insurance premiums and retirement contributions. We are an S-corp. ADP has been including them in the PPP loan payroll cost report with no cap.
Question: Do you recommend opening a new checking account, moving the funds there, and then paying all appropriate expenses from that account? I’ve heard others suggest this and would like to year your take on this. I mostly want to understand how the lender will look at your revenue/sales and loan money. Given all the other general business expenses, how do they determine exactly what source of money was used to pay that expense? If your revenue coming in is in the same checking account as your PPP loan funds, how do to they pinpoint and say “this expense was paid with this money and that expense was paid with this money? Thank you!
Clara, thanks for the great videos! With regard to "utilities," if you work out of your house but your cell phone, internet and landline bills (which my business typically pays for in full) are not in my business name, but in my personal name, do you think the SBA would forgive these bills?
Very Simple. Line 31 of Schedule C. divided by 52, x 8. This is the maximum allowable payroll for a sole proprietor can use and be forgivable. So if you have a payroll of the $100,000.00 max. Your loan would be for $20,883.33 ($100,000 /12 * 2.5). . Then the forgivable amount would be ($100,000/52) * 8... or $15,384.00. DONE !!!!!! Now... if you have some of the allowable expenses the difference you owe back can be reduced. But check the law on the April 14th release from the SBA. The allowable expenses for Sole Proprietors changed. All of what I have said here is from the APRIL 14th SBA guidelines. Pages 8-11. home.treasury.gov/system/files/136/Interim-Final-Rule-Additional-Eligibility-Criteria-and-Requirements-for-Certain-Pledges-of-Loans.pdf
Thanks for Videos. My question is Can you explain more details about Payroll Costs: How many percent of Pension like 401K, Defined Benefit we can apply for that? How to apply Worker Comp? How many percent of Health insurance to apply? Thanks.
Thank you for all the helpful information. Regarding employer contribution to retirement plan, do we prorate the annual contribution for the 8 weeks period ?
If we don’t use the entire amount of the PPP loan received on expenses and return the unused portion, is the 75% for payroll calculated on amount originally received (before the return of unused funds) or on the amount actually used (after the return of unused funds)?
I have a hair salon and I just received my ppp loan however my employees do not want to return because they make more on unemployment what will happen with the 75% that I need to spend on payroll?
That's crazy and can be a double hit for you. You're unemployment rates will most likely increase and you could potentially be stuck with the loan. I think you can simply pay them and they'll either have to quit or accept their checks. Forcing employees to accept their paycheck is something I never thought I would see. And when this shit is all said and done, maybe hire new people
Is forgiveness based on the loan amount or the forgivable amount? We received the $10,000 EIDL grant and $41,000 PPP loan. Is the 75/25 based on the $41,000 amount of the loan, or on the $31,000 maximum forgivable amount? Thank you in advance I love the videos and the way you explain things.
What types of things would fall into other payroll costs on your spreadsheet? Would the cost of running a payroll count? Such as the monthly fee I pay to intuit? What else?
I am one of those lucky few approved for the PPP Loan but as a self-employed w/ LLC status my fund is significantly lower than unemployment insurance per month. Will I be penalized for taking both?
Our restaurant got funded yesterday 4/22, weekly (Mon-Sun) payroll is paid on Wednesday, so technically 1st of the 8 weeks of payroll would be 4/29 and final on 6/17 is counted from date funded. We are preparing so we can be open for curbside on Monday, 4/27 as obviously we had no idea when/if we were going to get funded.. So CAN we actually do 1st payroll May 6th and 8th 6/24? We ARE paying every employee 100% of what their average pay was for 8 weeks in Jan/Feb (including average overtime) but only requiring them to work 50-75% of the hours. ie a normal 40 hr week $10/hr employee will work 30 but get paid 40 hrs at $10, if they averaged some overtime in Jan/Feb, I was going to add in a lump sum as "Ave OT comp".
Clara CFO Group we won’t because the 75% is actually a little more than a weekly payroll. $100,000/12 then x2= 16,666 which ppp loan used. $100,000/52 then x8 =$15385 which is a 8% difference. We aren’t supposed to give raises or increase salaries...so?
There should be more ruling coming out on this. My initial thought is to consider back pay for the period where you weren't in operation - but I hope we will get more guidance soon on situations like this!
Thanks for the very helpful info ! Question... if the PPP funds are deposited into the bank for a business, is there a strict start date to when you have to use it and hire employees back ? Or does it still fall within to using it from week 1 to week 8 all depending on business owners decision ?
How are accrued salary decreases and suspended planned salary increases accounted for? Can we include accrued suspended employee bonuses? We have suspended bonuses scheduled to be paid in March and planned salary increases starting in April. Can we apply our PPE proceeds to bringing these payroll costs current? Thank you.
Hello..thank you for the info. I have a few quick questions. When you calculate the PPP loan amount, i believe it is asking to add NET Advance from EIDL between Jan 2020 and 4/3/20 (plz correct me if I am wrong). Question1: Does the Advance money (grant) have to be included in the box "net advance from EIDL"? Question 2: what about the outstanding balance from EIDL, received after 4/3? What is the reason they put the date 4/3? hmmm... confusing...
Through researching, I keep hearing conflicting statements on the 75/25 ratio of forgiveness. Each time you have said that you MUST "reach" the 75% for payroll costs. Others are saying that you don't have to reach the 75% but that you just can't spend more than 25% of the loan on other expenses. Basically they are saying that "what you use will be forgivable if it is an allowable expenditure and what you don't will be returned to the bank", mostly concentrating on not exceeding the 25% non-payroll expenses, the FTE's, documentation, etc. . Can you please clarify? If they are right then the spreadsheet might be different regarding forgivable amounts. I haven't seen where it says you must "reach" the 75% on payroll. I believe you but can you point to the section in the act or other places where it states that you HAVE to spend the 75%? Thank you so much for your insight. Your videos are extremely helpful.
Lorrie - I am taking a conservative interpretation of the rule. I have had some back and forth with others who are saying what you are with the 25%. However, the guidance says "at least 75 % on payroll costs" so I am taking that guidance very literally for now. I do hope they will provide additional guidance soon! I actually hope I am wrong so that this will be more flexible for people. I lean on the conservative side!
@@ClaraCFO Probably everyone knows this by now but...I contacted SBA directly that day and they confirmed that "yes" at LEAST 75% has to be spent on payroll to have the loan be forgivable. Thank you for being conservative. Your videos are invaluable.
@Clara Can you site where you found that back pay on salaries? We stopped paying our salaries back in March and I'd like to have a document to provide more backbone so I can get us back on schedule with our salary?
If a sole proprietor (contractor) with no employees received the PPP loan, can they still accept a paying job from a homeowner during the 8 week period of the loan?
@@ClaraCFO Thanks for your reply Clara! One more question- as a sole proprietor contractor w/ no employees......would the storage unit I rent for business supplies and tools fall in the 25% of allowable business expenses?
My very important question. I’ve been reading a lot...what if I take 2nd. PPP loan but I didn’t get a 25% reduction in whatever documents I need (which I probably don’t have since I was a driver and I don’t keep that good of a record), and don’t ask for forgiveness and just pay for it? Is that possible?
I am a single member of LLC, I operate my business both from home (internet sales) PLUS I also sell to businesses at wholesale levels. I received the PPP and the EIDL. This is my question... may I expense the following? Home mortgage, car payment, gas, light bill, cellular and internet services, health insurance, dental debt. I am really "stucked" in this area. I know I have to get the figure from my schedule C. I am confused about this. Thank you for your videos! They are great!
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
Thanks for the video. I do have a question about FTE. If some of my employees don't want to come back due to the unemployment benefits, can I hire new employees to make up the difference in FTE?
Yes Nam, we don't have control over what someone chooses to do. HOWEVER, you should document your formal offer for re-employment to those individuals. This will help you prove your effort to rehire your original staff.
Clara CFO Group in regards to this same question how does that affect not reducing salary by 25%. Will the new hire salary be counted towards that. Also do we take the total of the 13 weeks in q1 to determine the amount needed to be used per individual in the 8 weeks or is it the weekly average of the 13 weeks in q1. Thanks
Is it all or nothing to get the ppp loan forgiven. For instant I was able to only get 65% spent on payroll does that make none of the fund forgivable? Or do you get a portion forgivable?
That's my understanding - however, you will find other's who disagree with me. I am being conservative just in case I am right! We need more guidance from the SBA about this.
My understanding is that, your forgivable amount will be reduced. Ex) if your employee headcount is lower and/or your employee's salary is reduced more than 25%
Pretty sure that you can be forgiven for what you used for payroll. Just return the unused money. Cannot raise wages or bonuses. Like Hannah says, not much guidance yet so go with her advice until better clarified. shes the pro.
I don't have rent or mortgage. We own the building but pay property taxes, property insurance which is part of escrow if we would have a mortgage. Does that apply for the PPP.
I'm independent contractor ( truck driver). I know I qualify but I do not have a payroll program I get paid weekly by the company I leased with and get 1099 at the end of the year. How would I prove payroll in order to be forgiven? Or expenses? Like diesel, repairs ? Thanks
Thanks for the videos! Can we include our entire health insurance premium as owners? We only cover 25% of employees but can we claim the entire premium we pay for our family? Thank you
You include healthcare premiums in payroll costs unless you file a schedule C - then it's not allowed. I haven't seen anything about backing out dependent healthcare. I assume you include any health benefit you offered before the crisis. You couldn't add dependents right now and expect them to be covered.
Hi. Thanks for the information. So I have a big question that I can find no answer to. I am a self employed home remodeler(self employed sole proprietor). I have been restricted from working for 5 weeks. I should finally get my PPP "loan" money early this week. But the governor may be letting us go back to work next Friday. So can i pay myself and get forgiveness over the 8 weeks regardless, even if the governor clears us for work?
Hello Hanna, I have three things that need your clarification. First of all, all my staffs, waiters & waitresses work pretty much on tips. After COVID-19 pandemic, they don't make as much as tips they made before. Can I use PPP funds to pay them their wages plus the difference in tips to get them back to the wages that they have before the pandemic? For example, before COVID-19, one of my staff makes $1000 in tips and $300 in wage. Now she makes only $350 in tips and $300 in wage because of COVID-19. So, can I use the PPP funds to pay her $300 in wage plus $650 (the loss in tips)? Secondly, what happens if my payroll is not at least 75% of the PPP loan? As a result, my PPP loan may not forgivable or it is only forgiven up to the my payroll expense plus 25% other expense. Lastly, storage rent is considered "rent" as other expense? Thank you very much. Truong
Same question. What if the server is on hourly wage now instead of tip wage? For part time servers, do we have to give them the same hours in order to get the loan forgiven? For example, one server use to make $500/week (tip and server wage combined) for 20 hour/week. To get the loan forgiven, do i need to give that server $25/hr for 20 hours? Can i set a flat rate of $15 for all my servers regardless of how much they use to make? Can i reduce their hours, but give them a higher pay? Please do a video for the PPP forgiveness base on restuarant!
Clara I have a question what if I received the funds but I don’t need all of it do I return the rest of it?? Or if I use it the whole thing on other things besides payroll what is the interest rate included to pay back the loan?? I hope I made sense.
I am a sole proprietor planning on going back to work in a few weeks. I received a PPP loan yesterday. I saw on another video that I should be able to immediately claim my 8 weeks of pay and have all of my wages forgiven. If I go back to work soon does that take away from the forgivable amount since I wii be generating income again?
Pretty sure you are good to go. No where does it say you cannot work. Take the Schedule C line 31, divide by 52 and multiply by 8. This is your automatic forgiveness as a Sole Proprietor. The SBA made it very easy for SMLLC and SOle Proprietors. Easy math. Most of us though will not have enough allowable expenses to be 100% forgiven, so keep the difference till the end and just pay it back.
True... I've been looking for verification too. However, it's required in most states, so I can't see how it can logically be excluded. But you are right, I haven't seen it specifically included anywhere. It's a state program in my state and we pay premiums through payroll. It was included in payroll costs when we applied for loans....but we shall see!
Question: What if i am behind in Employee Benefits payments (i owe 3 months Dental insurance, can i count the back payments as part of the 75% forgiveness for payroll?
I believe you can go as far back as February 15. However, being that whatever is not forgivable will be loaned at 1% interest for 2 years, I'd pay the benefits.
I have a gym still closed by state order. My employees are not working. Currently I am paying them 'retention' pay during the shutdown. Will this count toward my payroll headcount and payroll cost for PPP forgiveness? The pay is not based on hours.
Hi Clara - I already posted my EIDL question on your other channel. This is a PPP question. We returned PPP loan back on 5/14 thinking that we cannot spend 75% on payroll within the 8-week period by 6/30 and also we're still on state lockdown order. Now that the Senate just passed the bill that gives extension to dec 31 which we think we could have enough time to rebuild the team. Do we need to re-apply the PPP again? or just contact the bank and request for reactivation? Thank you
How does it affect your forgiveness amount if you have an employee who is out during your entire 8 week period on EFMLEA due to kids being off from school? I understand that the $$ amount is not counted in your payroll, but are you penalized since they only get 2/3 (66.66%) instead of at least 75% ?
Question: my store rent was due on April 1st. I got the PPP on April 16th and got funded on April 17th. I paid the April rent on April 20th. Will the April rent get forgiven?
As long as the rent and other non-payroll allowable costs don't exceed 25%, you will likely be able to include 2 rent payments in your 8 week period. Whether it's April & May or May & June - I am not sure if they will care. Document all payments just in case!
@@ClaraCFO I'd follow up on his question with we're wondering if we can "sneak" THREE rent payments into the eight weeks? Like, in his example, if you get the loan on 4/17, the pay April rent on 4/20, May rent on 5/1, and June rent on 6/1...you obviously have got three rent payments into the eight weeks...any idea if they'll call foul on that massaging of the payment dates?
@@maureenmccormick7176 true - I've been digging for this. I wonder why it wouldn't be though? It's typically a required cost. You can't turn it off in most states, so it seems like it would be eligible as a payroll cost.
Do we have to itemize our utility bills? For example, we have Comcast and Verizon but I read that we are only forgiven for our landlines when it comes to phones and computers (Comcast) but some of our employees are on the road and we pay for cell phones and tablets. Would that mean that Verizon would not be considered a forgivable utility?
I have SCorp ( form1120S) I am not pay salaries for me and pay 1099 for my employees(from1099 MISC). How I calculate average monthly for PPP Loan. What documents need for lender? Thanks
I reapplied 3 time but I have problem my documents and averages monthly payroll. I have S Corp , I don’t pay my salaries and payroll for employees 1099. What I can do, and what need documents? minhvien21051969@gmail.com
@@minhvien7664 Hi Minh, unfortunately, you probably won't qualify. 1099 contractors are not employees and you should be on payroll as an S-corp owner. I think that might be why you have not been approved?
Can I use PPP to pay interest of business credit card (S corporation)? What happen once PPP coverts into a loan (no forgivable portion), can I use it for anything in my business?
These videos are very helpful! We pay employees weekly. Can 941 deposits be made weekly during the 8 week period rather than monthly? Also, would employee portion of April 941 taxes due May 15th, but for pay periods prior to receiving the PPP Loan, be payable with PPP funds?
the 75% is a little deceptive. You CANNOT use more than 25% on expenses other than Payroll. You can use all you want for payroll... up to 100%. But 100% is hard to get to... just how the numbers and the time limit works out. So if you use the max 25% on other expenses and only 60% on payroll... you would end up having to return the 15% or take out the loan at the end for the 15%. Hannah can correct me if im wrong, but pretty sure of this.
how do you compete with unemployment extra 600? still being forced to stay closed but if you get ppp loan and you want to at least use it to pay rent and utilities?
I agree - it is difficult - video coming out soon on this. You can use it for those purposes, but you won't be able to claim forgiveness on the funds because you aren't reaching the threshold of 75% payroll costs.
@@ClaraCFO I have the same problem, got the loan and nobody to pay because my employees are collecting unemployment +$600 and don't want to come back to work.
Can I pay my employees their regular wages AND The $600/week so they’ll come back to work? We are a restaurant and none of them will come back - until I actually offered them the $600.
I made a mistake on my application and asked for more money than I was supposed to. They ended up paying me the whole amount I asked for, what should I do? Give the money back? Hire more people? Give my current staff a raise?
why wouldn't healthcare premiums be included for the owners of an llc if in fact they are part of the owner compensation replacement? on your spreadsheet you have health insurance coverage for employees(not business owner)? should that be on other payroll costs?
SBA guidance on April 14th took away the health and retirement benefits for the owners of Sole Proprietors and SMLLC. But the expense paid on these to employees only can be use for forgiveness. This was done to keep owners with NO employees from getting a unfair windfall by almost being guaranteed to forgive 100%. Makes sense.
I’m an LLC S Corporation business. I run it out of my home. I’m paid salary and the rest of my employees are paid part-time. I have group insurance through my business for myself since I’m the only one who is full time. Can I claim that? Also, what about my utilities such as business phone Rent ext? I’m in Illinois so I’m not sure if that applies? Thank you for all your information. It has helped me clear up a bunch of questions.
thank you for the information. i have some questions need your help please. 1. 75% cost of payroll means the employees salary with their tax part right? i have some confusion on this part. 2. as of covid-19 some people are not able to work, so we have to hire new workers. can i use payroll protection money to new workers?
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
Great video, I have one big question. What if a company wants to pay employees/employee more money say in bonuses/extra hours to have more forgiveness? Do you have an opinion which way the SBA will side on paying more than 2019 figures.
100% of the loan can go to forgiveness for employee payroll costs as long as you don't reduce staff hours by more 25% or reduce staff. However if you want to use it for rent or utilities only 25% can go towards that. You can't get more than 100% for forgiveness.
Thank you Clara After listening to your presentation i figured that the entire PPP ist a big lie. We have (really) received our money grant on Monaday the 4th. Our payroll and rents are always due on the 30th and 1st. The 4th of may plus 8 weeks are the 22nd of june. That means i can get forgiven ONLY one payroll and one rent and the rest is just for nothing because it will be paid 8 days after the PP ends. Am I right? What a rip off !!!
I received my funding for PPP on April 23.Eight weeks of payroll will take me to June 18th. If my business is still not open do I need to keep my employees until June 30th?
If you want the loan forgiven, then probably yes Jerome. This loan may not be the best fit for everyone's situation, so you will need to consider what's best for your business!
@@ClaraCFO It wasn't clear if the immediate use of the money for eight weeks took precedent over employee retention until June 30. Since I am closed now, would it make sense to wait a week or 2 to bring back the employees? Thanks for your reply.
So at least 75% on the money spend from the ppp loan has to be payroll if I’m understanding correctly? I have to spend it in payroll 75% for the loan to be forgiven. If I have 50% payroll and 50% othe operational expenses that will not be accepted. I’m confused, help please
if my ppp is 2000 and eidl is 2000, then does that mean they cancel out since eidl reduces ppp (assuming ppp and eidl is used independent & separately & accurately)?...i'm so confused, can you help?!
If your EIDL Grant is $2000 and your PPP is $2000, then this means that you have have a total of $2,000 forgiven. So you can use the PPP money and the grant money, but only $2,000 total will be forgiven....regardless of what you spend it on
@@ClaraCFO Thanks! It sounds smart then not to take eidl since it will effect my full amount of ppp. If I'm understanding correctly, say if PPP is higher at $4000 then it has a chance of possibly being fully forgiven if used correctly, however by taking eidl of $2000 then i've essentially taken my chance of complete approval and will need to pay back at least $2000- am i correct?
Hi Clara, I have a small business. I’m a LLC company. I have a couple employees on payroll, but always filed a schedule C for my personal income at the end of the year. Can I write myself a paycheck as part of the 75%? That will then be forgiven? I did use my schedule C income from 2019 to help figure out my loan amount. Thanks
i am a dentist who owns a dental clinic. can i use ppp to pay additional PPE (personal protection equipment) . what category of on your excel sheet should i allocate this additional expense. good excel sheet thx you. i am thinking utility? maybe?
Hi Edward - I haven't seen anything in PPP documentation about covering PPE. However, I know the CARES act on a broader basis has provisions for PPE. I, personally, am unfamiliar with that part of the act though!
I got the eidl grant earlier than the PPP loan. Can I use all the grant money to pay restaurant food cost and insurance first, and then use the PPP money next, both money can be forgiven?
If you got the EIDL grant, it will offset the total forgiveable amount of the PPP. But you can use it for food costs and insurance! You can't cover those things with the PPP, so that's a great use of the money!
Clara CFO Group It’s very kind of u to reply the message, thanks. On ur video said it’s better not increase the payroll the people u keep during the business is closed, how about we open the business on May, can I increase?
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
The Citi bank wants me to sign a loan note before ppp fund is released. Do I have to pay 10% interest when the note is due? I am the officer of the company, and I am the only employee of this company. Thank you very much if you could respond to me
Is the 75% payroll requirement based on total amount of loan, or amount of loan actually spent? If I borrow 200,00 but use 160,000, and give the rest back, is the 75% based on the original 200,000, or the 160,000 actually used.
There is no limit on how much you can use for payroll. You just cant use more than 25% of the loan for other approved expenses. You cannot raise wages or bonuses. Any difference, just pay it back.
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To get the PPP planning spreadsheet, get that here: clara-cfo-group-llc.ck.page/d5ef5d9b84
My very important question. I’ve been reading a lot...what if I take 2nd. PPP loan but I didn’t get a 25% reduction in whatever documents I need (which I probably don’t have since I was a driver and I don’t keep that good of a record), and don’t ask for forgiveness and just pay for it? Is that possible?
I have watched several videos regarding PPP, your video is THE BEST. It is so easy to understand and it answered all my questions. THANK YOU.
🙌
Great info. Thanks Clara for sharing. We got the PPP late in May and most of employees have been on unemployment and lockdown in California is still in force for our business, not clear how we would spend the money correctly within 8 weeks for forgiveness. I heard your answers a little here and there throughout. Appreciate your thoughts on this. Thank you
Regarding current payroll costs vs payroll costs we applied with (2019 Schedule C) If we have averaged more income leading up to the month we received the PPP loan, then our average payroll would be higher than what we applied with. Should we increase the Owner Compensation Replacement accordingly?
th-cam.com/video/O_QtEasfsLM/w-d-xo.html
Thanks for these answers. I have some question. If a company gets a PPP loan funded into their bank account on say April 21st.
Is this correct, they have to spend at least 75 percent of the loan in the next 8 weeks on payroll, so they have until June 16th to spend at least 75 percent of the loan on payroll and the other funds for rent and utilities (we will skip interest).
April 21 - loan funded
April 28 (7 days),
May 5 (14 days),
May 12th (21 days)
,May 19 (28 days)
May 26, (35 days)
June 2, (42 days)
June 9 (49 days)
June 16 (56 days = 8 weeks)
If the company has say 20 employees on February 15th and during the April 21st to June 16th period they have 20 and the payroll expense is say 80% of the ppp loan and rent is the other 20% and the total amount spent exceeds or is the same as the PPP loan, what does the company do? Do they contact the bank on say June 17th or 18th and say we want to have the loan forgiven and bring documentation to the bank?
Does June 30th play any role if the company is not seasonal?
What happens if we overestimated our payroll (due to bonuses in December) so our loan amount is a little higher therefore our payroll costs might not meet 75%. What will happen if we don't meet the 75%?
Thanks for your videos. So helpful!
Maybe some of your employees worked additional hours now for the next 2 months.
Also, you can return unused funds
or keep the funds to cover payroll and rent in the future at a cost of 1%.
@@charlesharvey6184 Yes, every other update makes it sounds if you do that then fraud, scaring us. Look, these loans took little care about utilities and rents Payroll Payroll Payroll but without utilities on and rents paid there is no business. Sure cover payroll for 2 months but after that guess, cut hours and people then they go on unemployment. Bank said if you listed 7;employees you have to keep 7. Why? If 5 return then give those hours to those 5. Same wages? If we reopen and a part timer works additional hours than before, well good for them. They also say owners cannot really pay themselves now. My wife too little pay for months to keep things going, well the last year too. We got bills as well. So if she was to actually write herself a paycheck from the S corp and a draw from the Sole P, that is frowned on. Just turn these into an emergency SBA loan and let owners decide what and how to spend it. That is what we need. I mean when they stipulate funding date forward 56;days doesn't help when the government forced you to shut down for 1-2 months so now you have those months of rent and utilities to catch up on. Few companies offer businesses any protection unlike residential companies, no check turn it off. Rents? They want money or evict or 3 day pay or vacate. Yes, can use the income not going to payroll to pay bills, providing business returns to normal. I wonder if she wants to pay me and her more, can we issue us payroll or draw from our own business accts not using the PPP loan money?
My normally full-time employees are currently working only 24 hours per week. If my employee headcount does not decrease, and I spend more than 75% of the PPP money on payroll, am I required to increase employee hours to full-time in order to qualify for loan forgiveness? Does having employees receive Partial Unemployment for their reduced pay during the PPP 8-week period effect my PPP loan forgiveness?
Like to know too
Q - if employees are unwilling to come back to work and/or can't find new employees, can I just use 25% of PPP on rent and return the rest (75%) after 8 weeks? And have the 25% be forgivable?
I have this question as well. One bank said they would do this unless SBA came back with a different interpretation.
However reading the law I would say it's prorated so with zero enployees it might be zero rent forgiveness. So I am also confused.
Also I believe that eidl needs to be applied first to business costs such as rent before the PPP 25% can count towards that.
My business is closed but we hope to reopen by beginning of June if the Governor allows. I have applied for and signed for the PPP (no money given yet). We are seasonal business and we would normally have opened at the end of March. Does it make any sense to take the money and hold onto it until we open. Then use it for payroll and utilities. Knowing that we will not come close to spending 75% of what we did in 2nd Quarter of 2019? Does it make sense to get some forgiveness rather than nothing? It seems a big gamble to me to pay employees who are not even here (many of our employees come to the area just to work for us- think outdoor adventure). What if I screw it up and I don't get forgiveness? But I could certainly use the help in June when we open. And I desperately need help with utilities. I applied for EIDL but never heard anything. That would have been more ideal but I think they are out of money. Feeling like I should take what I can get, 50% off payroll is better than nothing.
although i can't give you specific guidance on this, I definitely hear your concerns. It does seem like a gamble. You could take the funds and not spend them until you have more guidance on open dates and forgiveness limits. Worst case scenario, you could hold onto the money for a few months and pay it back if you realize you don't want to use it at all. You would be out the 1% annual interest rate, but could be worth having just in case!
Our company provides services to homes and businesses, therefore each employee either has a company truck or the ones that perform inspections only may use their own vehicle. Do fuel costs meet the definition of utilities in this sense, or reimbursement at the standard mileage rate for those using their own vehicles?
Fuel costs have been specifically called out as an allowable utility if it's for a company vehicle.
Hi I have Question some of my employees are through temporary agencies, how can we use them in the PPP ?
are they 1099? or actual employees?
@@ClaraCFO from a temp agency
I closed my business on 3/18, and I have been paying my staff instead of furloughed them. If I get my PPP this round, can I claim what I’ve been paying my staff before? If not, can I claim the employment retention tax credit (since it’s not in the same time period). Thank you so much for all the helpful information.
Hi Simon - you won't be able to take the ERC and the PPP
Thanks for the information. I only kept one employee for the past 6 weeks and last week brought back employees at half of their hours, keeping the initial employee working the rest of their hours as well. I would like to give her a pay increase with the PPP loan for covering all shifts of our small business during these past 8 weeks as well as the covered period until our business is back to normal. Is this allowed? I am reading about "incentive pay" and questions regarding increasing pay for employees working more while operating in a limited manner, but nothing really directly answering that question.
Great information Hannah! My question is also around business owner insurance premiums and retirement contributions. We are an S-corp. ADP has been including them in the PPP loan payroll cost report with no cap.
Yes Tami - Include group insurance premiums and retirement contributions as a payroll cost.
good videos, you are one of the first people i have seen discussing businesses that are not open
Ben - there's another video coming shortly about this.
I just got $ 22,000 from PPP. Is this 75% of money to pay to employees from now on or from March & April when they were not working?
No, the covered period starts on the day of disbursement. So you use it going forward.
we pay biweekly basis and one week fall in before and one week after we received the loan, is only one week counted as payroll payment or two weeks..?
th-cam.com/video/VvVRNZEipFQ/w-d-xo.html
Question:
Do you recommend opening a new checking account, moving the funds there, and then paying all appropriate expenses from that account?
I’ve heard others suggest this and would like to year your take on this.
I mostly want to understand how the lender will look at your revenue/sales and loan money. Given all the other general business expenses, how do they determine exactly what source of money was used to pay that expense? If your revenue coming in is in the same checking account as your PPP loan funds, how do to they pinpoint and say “this expense was paid with this money and that expense was paid with this money?
Thank you!
mxaguila yeah i have that concern. we have payroll account and a business expense account.
Clara, thanks for the great videos! With regard to "utilities," if you work out of your house but your cell phone, internet and landline bills (which my business typically pays for in full) are not in my business name, but in my personal name, do you think the SBA would forgive these bills?
I’m also a single member llc Scorp my business pays my dental and life insurance premiums. Is that a 25% expense.
Dental is Payroll cost. Life insurance is unforgiveable
My question is how do sole proprietor/owners with no employees pay ourselves so the loan is forgiven
I have the same question!
Could I just do an owners draw for 100% of the loan as a legitimate payroll cost? What kind of documentation would I use to show that transaction?
@@jaispera wondering the same thing. Haven't gotten any good answers even from the credit union I got the loan from
Very Simple. Line 31 of Schedule C. divided by 52, x 8. This is the maximum allowable payroll for a sole proprietor can use and be forgivable. So if you have a payroll of the $100,000.00 max. Your loan would be for $20,883.33 ($100,000 /12 * 2.5). . Then the forgivable amount would be ($100,000/52) * 8... or $15,384.00. DONE !!!!!! Now... if you have some of the allowable expenses the difference you owe back can be reduced. But check the law on the April 14th release from the SBA. The allowable expenses for Sole Proprietors changed. All of what I have said here is from the APRIL 14th SBA guidelines. Pages 8-11. home.treasury.gov/system/files/136/Interim-Final-Rule-Additional-Eligibility-Criteria-and-Requirements-for-Certain-Pledges-of-Loans.pdf
@@jaispera no... payroll / 52 *8 is your forgivable amount for owner payroll. reduces with other allowable expenses from there.
Thanks for Videos. My question is Can you explain more details about Payroll Costs: How many percent of Pension like 401K, Defined Benefit we can apply for that? How to apply Worker Comp? How many percent of Health insurance to apply? Thanks.
I am self-employed and on Medicare. Can I use 8 weeks of Medicare Part B premiums in the forgiveness calculation?
Bruce, stay tuned for another video. I am researching this Q now.
Thank you for all the helpful information. Regarding employer contribution to retirement plan, do we prorate the annual contribution for the 8 weeks period ?
If we don’t use the entire amount of the PPP loan received on expenses and return the unused portion, is the 75% for payroll calculated on amount originally received (before the return of unused funds) or on the amount actually used (after the return of unused funds)?
Appreciate the additional clarifications here Hannah! Keep em coming:)
Will do!
I have a hair salon and I just received my ppp loan however my employees do not want to return because they make more on unemployment what will happen with the 75% that I need to spend on payroll?
This video should help michelle: th-cam.com/video/V_92enacm6k/w-d-xo.html
That's crazy and can be a double hit for you. You're unemployment rates will most likely increase and you could potentially be stuck with the loan. I think you can simply pay them and they'll either have to quit or accept their checks. Forcing employees to accept their paycheck is something I never thought I would see. And when this shit is all said and done, maybe hire new people
Hi you did not mention anything about the transportation costs under the other 25% section. Can you give
True - I saw that in the ruling - but I have no idea what would be included as a transportation cost. Seems very vague.
Is forgiveness based on the loan amount or the forgivable amount? We received the $10,000 EIDL grant and $41,000 PPP loan. Is the 75/25 based on the $41,000 amount of the loan, or on the $31,000 maximum forgivable amount? Thank you in advance I love the videos and the way you explain things.
What types of things would fall into other payroll costs on your spreadsheet? Would the cost of running a payroll count? Such as the monthly fee I pay to intuit? What else?
The items are listed on the spreadsheet - trying to make it easy!
Software costs and payroll processing fees are currently NOT allowable costs.
Thanks
I am one of those lucky few approved for the PPP Loan but as a self-employed w/ LLC status my fund is significantly lower than unemployment insurance per month. Will I be penalized for taking both?
Our restaurant got funded yesterday 4/22, weekly (Mon-Sun) payroll is paid on Wednesday, so technically 1st of the 8 weeks of payroll would be 4/29 and final on 6/17 is counted from date funded. We are preparing so we can be open for curbside on Monday, 4/27 as obviously we had no idea when/if we were going to get funded.. So CAN we actually do 1st payroll May 6th and 8th 6/24?
We ARE paying every employee 100% of what their average pay was for 8 weeks in Jan/Feb (including average overtime) but only requiring them to work 50-75% of the hours. ie a normal 40 hr week $10/hr employee will work 30 but get paid 40 hrs at $10, if they averaged some overtime in Jan/Feb, I was going to add in a lump sum as "Ave OT comp".
Sheila - I wonder if you will be able to hit your 75% even if you don't include that last pay cycle out side of your 8 week window - have you checked?
Clara CFO Group we won’t because the 75% is actually a little more than a weekly payroll. $100,000/12 then x2= 16,666 which ppp loan used. $100,000/52 then x8 =$15385 which is a 8% difference. We aren’t supposed to give raises or increase salaries...so?
There should be more ruling coming out on this. My initial thought is to consider back pay for the period where you weren't in operation - but I hope we will get more guidance soon on situations like this!
Thanks for the very helpful info ! Question... if the PPP funds are deposited into the bank for a business, is there a strict start date to when you have to use it and hire employees back ? Or does it still fall within to using it from week 1 to week 8 all depending on business owners decision ?
How are accrued salary decreases and suspended planned salary increases accounted for? Can we include accrued suspended employee bonuses? We have suspended bonuses scheduled to be paid in March and planned salary increases starting in April. Can we apply our PPE proceeds to bringing these payroll costs current? Thank you.
I wouldn't include these myself. Remember the idea is to keep payroll status quo - bonuses will not be looked on kindly I bet.
Hello..thank you for the info. I have a few quick questions. When you calculate the PPP loan amount, i believe it is asking to add NET Advance from EIDL between Jan 2020 and 4/3/20 (plz correct me if I am wrong).
Question1: Does the Advance money (grant) have to be included in the box "net advance from EIDL"?
Question 2: what about the outstanding balance from EIDL, received after 4/3?
What is the reason they put the date 4/3? hmmm... confusing...
Through researching, I keep hearing conflicting statements on the 75/25 ratio of forgiveness. Each time you have said that you MUST "reach" the 75% for payroll costs. Others are saying that you don't have to reach the 75% but that you just can't spend more than 25% of the loan on other expenses. Basically they are saying that "what you use will be forgivable if it is an allowable expenditure and what you don't will be returned to the bank", mostly concentrating on not exceeding the 25% non-payroll expenses, the FTE's, documentation, etc. . Can you please clarify? If they are right then the spreadsheet might be different regarding forgivable amounts. I haven't seen where it says you must "reach" the 75% on payroll. I believe you but can you point to the section in the act or other places where it states that you HAVE to spend the 75%? Thank you so much for your insight. Your videos are extremely helpful.
Lorrie - I am taking a conservative interpretation of the rule. I have had some back and forth with others who are saying what you are with the 25%. However, the guidance says "at least 75 % on payroll costs" so I am taking that guidance very literally for now. I do hope they will provide additional guidance soon! I actually hope I am wrong so that this will be more flexible for people. I lean on the conservative side!
@@ClaraCFO Thank you Hannah. Very wise idea and choice for now. Once I did the budget it looks like we'll be okay. Thanks so much.
@@ClaraCFO Probably everyone knows this by now but...I contacted SBA directly that day and they confirmed that "yes" at LEAST 75% has to be spent on payroll to have the loan be forgivable. Thank you for being conservative. Your videos are invaluable.
If you are self-employed what documentations do you have to show? thanks
@Clara Can you site where you found that back pay on salaries? We stopped paying our salaries back in March and I'd like to have a document to provide more backbone so I can get us back on schedule with our salary?
If a sole proprietor (contractor) with no employees received the PPP loan, can they still accept a paying job from a homeowner during the 8 week period of the loan?
Yes! There's no requirement to stop work if you get a PPP!
@@ClaraCFO Thanks for your reply Clara! One more question- as a sole proprietor contractor w/ no employees......would the storage unit I rent for business supplies and tools fall in the 25% of allowable business expenses?
Will there be a process to apply to have the loan forgiven once all the funds are used for payroll? If so when do we apply for that?
th-cam.com/video/VvVRNZEipFQ/w-d-xo.html
Can I hire new employees if the old employee don't want to come back? Can the new hire employee take the place of the old?
Yes!
can you pay the new employees more? or do they have to have the same pay rate or salary?
I can add tip to my servers paycheck? As long as it matches up with their declare tips from previous paychecks?
Yes, tips are included in the loan payroll amount.
My very important question. I’ve been reading a lot...what if I take 2nd. PPP loan but I didn’t get a 25% reduction in whatever documents I need (which I probably don’t have since I was a driver and I don’t keep that good of a record), and don’t ask for forgiveness and just pay for it? Is that possible?
Can a sole proprietor with no other employees pay more than 75% towards payroll cost as long as it does not exceed $8,333.33?
I am a single member of LLC, I operate my business both from home (internet sales) PLUS I also sell to businesses at wholesale
levels. I received the PPP and the EIDL. This is my question... may I expense the following? Home mortgage, car payment, gas, light bill, cellular and internet services, health insurance, dental debt. I am really "stucked" in this area. I know I have to get the figure from my schedule C. I am confused about this. Thank you for your videos! They are great!
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
Thanks for the video. I do have a question about FTE. If some of my employees don't want to come back due to the unemployment benefits, can I hire new employees to make up the difference in FTE?
Yes Nam, we don't have control over what someone chooses to do. HOWEVER, you should document your formal offer for re-employment to those individuals. This will help you prove your effort to rehire your original staff.
Clara CFO Group in regards to this same question how does that affect not reducing salary by 25%. Will the new hire salary be counted towards that. Also do we take the total of the 13 weeks in q1 to determine the amount needed to be used per individual in the 8 weeks or is it the weekly average of the 13 weeks in q1. Thanks
Is it all or nothing to get the ppp loan forgiven. For instant I was able to only get 65% spent on payroll does that make none of the fund forgivable? Or do you get a portion forgivable?
That's my understanding - however, you will find other's who disagree with me. I am being conservative just in case I am right! We need more guidance from the SBA about this.
My understanding is that, your forgivable amount will be reduced. Ex) if your employee headcount is lower and/or your employee's salary is reduced more than 25%
Pretty sure that you can be forgiven for what you used for payroll. Just return the unused money. Cannot raise wages or bonuses. Like Hannah says, not much guidance yet so go with her advice until better clarified. shes the pro.
I don't have rent or mortgage. We own the building but pay property taxes, property insurance which is part of escrow if we would have a mortgage. Does that apply for
the PPP.
I'm independent contractor ( truck driver). I know I qualify but I do not have a payroll program I get paid weekly by the company I leased with and get 1099 at the end of the year. How would I prove payroll in order to be forgiven? Or expenses? Like diesel, repairs ? Thanks
Thanks for the videos! Can we include our entire health insurance premium as owners? We only cover 25% of employees but can we claim the entire premium we pay for our family? Thank you
You include healthcare premiums in payroll costs unless you file a schedule C - then it's not allowed. I haven't seen anything about backing out dependent healthcare. I assume you include any health benefit you offered before the crisis. You couldn't add dependents right now and expect them to be covered.
Hi. Thanks for the information. So I have a big question that I can find no answer to. I am a self employed home remodeler(self employed sole proprietor). I have been restricted from working for 5 weeks. I should finally get my PPP "loan" money early this week. But the governor may be letting us go back to work next Friday. So can i pay myself and get forgiveness over the 8 weeks regardless, even if the governor clears us for work?
yes you can preston!
Hello Hanna,
I have three things that need your clarification.
First of all, all my staffs, waiters & waitresses work pretty much on tips. After COVID-19 pandemic, they don't make as much as tips they made before. Can I use PPP funds to pay them their wages plus the difference in tips to get them back to the wages that they have before the pandemic? For example, before COVID-19, one of my staff makes $1000 in tips and $300 in wage. Now she makes only $350 in tips and $300 in wage because of COVID-19. So, can I use the PPP funds to pay her $300 in wage plus $650 (the loss in tips)?
Secondly, what happens if my payroll is not at least 75% of the PPP loan? As a result, my PPP loan may not forgivable or it is only forgiven up to the my payroll expense plus 25% other expense.
Lastly, storage rent is considered "rent" as other expense?
Thank you very much.
Truong
Same question. What if the server is on hourly wage now instead of tip wage? For part time servers, do we have to give them the same hours in order to get the loan forgiven? For example, one server use to make $500/week (tip and server wage combined) for 20 hour/week. To get the loan forgiven, do i need to give that server $25/hr for 20 hours? Can i set a flat rate of $15 for all my servers regardless of how much they use to make? Can i reduce their hours, but give them a higher pay? Please do a video for the PPP forgiveness base on restuarant!
Clara I have a question what if I received the funds but I don’t need all of it do I return the rest of it?? Or if I use it the whole thing on other things besides payroll what is the interest rate included to pay back the loan?? I hope I made sense.
I am a sole proprietor planning on going back to work in a few weeks. I received a PPP loan yesterday. I saw on another video that I should be able to immediately claim my 8 weeks of pay and have all of my wages forgiven. If I go back to work soon does that take away from the forgivable amount since I wii be generating income again?
Pretty sure you are good to go. No where does it say you cannot work. Take the Schedule C line 31, divide by 52 and multiply by 8. This is your automatic forgiveness as a Sole Proprietor. The SBA made it very easy for SMLLC and SOle Proprietors. Easy math. Most of us though will not have enough allowable expenses to be 100% forgiven, so keep the difference till the end and just pay it back.
You mentioned including worker’s comp. insurance as part of “Payroll Costs”. I have not seen that to be verified anywhere.
True... I've been looking for verification too. However, it's required in most states, so I can't see how it can logically be excluded. But you are right, I haven't seen it specifically included anywhere. It's a state program in my state and we pay premiums through payroll. It was included in payroll costs when we applied for loans....but we shall see!
th-cam.com/video/CZ7MXj4kDBM/w-d-xo.html
Question: What if i am behind in Employee Benefits payments (i owe 3 months Dental insurance, can i count the back payments as part of the 75% forgiveness for payroll?
They likely would only accept 2 months of benefit payments. I don't know if payment of older liabilities will be accepted. Ask your bank.
I believe you can go as far back as February 15. However, being that whatever is not forgivable will be loaned at 1% interest for 2 years, I'd pay the benefits.
I keep hearing " 8 weeks of payroll " What is the time frame of the forgivable part of the loans ?
8 weeks from the date you received the loan. You might need to adjust your payroll dates to ensure you spend it during the 8 week period
I have a gym still closed by state order. My employees are not working. Currently I am paying them 'retention' pay during the shutdown. Will this count toward my payroll headcount and payroll cost for PPP forgiveness? The pay is not based on hours.
Hi Clara - I already posted my EIDL question on your other channel. This is a PPP question. We returned PPP loan back on 5/14 thinking that we cannot spend 75% on payroll within the 8-week period by 6/30 and also we're still on state lockdown order. Now that the Senate just passed the bill that gives extension to dec 31 which we think we could have enough time to rebuild the team. Do we need to re-apply the PPP again? or just contact the bank and request for reactivation? Thank you
Would property taxes on our building be considered as an expense for PPP forgiveness?
How does it affect your forgiveness amount if you have an employee who is out during your entire 8 week period on EFMLEA due to kids being off from school? I understand that the $$ amount is not counted in your payroll, but are you penalized since they only get 2/3 (66.66%) instead of at least 75% ?
Question: my store rent was due on April 1st. I got the PPP on April 16th and got funded on April 17th. I paid the April rent on April 20th. Will the April rent get forgiven?
As long as the rent and other non-payroll allowable costs don't exceed 25%, you will likely be able to include 2 rent payments in your 8 week period. Whether it's April & May or May & June - I am not sure if they will care. Document all payments just in case!
@@ClaraCFO I'd follow up on his question with we're wondering if we can "sneak" THREE rent payments into the eight weeks? Like, in his example, if you get the loan on 4/17, the pay April rent on 4/20, May rent on 5/1, and June rent on 6/1...you obviously have got three rent payments into the eight weeks...any idea if they'll call foul on that massaging of the payment dates?
We can include Workers Compensation costs into the forgiveness??
Be careful - there is no specific clarity on this. At this point, it appears unlikely workers compensation will be forgivable.
@@maureenmccormick7176 true - I've been digging for this. I wonder why it wouldn't be though? It's typically a required cost. You can't turn it off in most states, so it seems like it would be eligible as a payroll cost.
Do we have to itemize our utility bills? For example, we have Comcast and Verizon but I read that we are only forgiven for our landlines when it comes to phones and computers (Comcast) but some of our employees are on the road and we pay for cell phones and tablets. Would that mean that Verizon would not be considered a forgivable utility?
I have SCorp ( form1120S) I am not pay salaries for me and pay 1099 for my employees(from1099 MISC). How I calculate average monthly for PPP Loan.
What documents need for lender? Thanks
I reapplied 3 time but I have problem my documents and averages monthly payroll. I have S Corp , I don’t pay my salaries and payroll for employees 1099. What I can do, and what need documents?
minhvien21051969@gmail.com
@@minhvien7664 Hi Minh, unfortunately, you probably won't qualify. 1099 contractors are not employees and you should be on payroll as an S-corp owner. I think that might be why you have not been approved?
Can I use PPP to pay interest of business credit card (S corporation)? What happen once PPP coverts into a loan (no forgivable portion), can I use it for anything in my business?
These videos are very helpful! We pay employees weekly. Can 941 deposits be made weekly during the 8 week period rather than monthly? Also, would employee portion of April 941 taxes due May 15th, but for pay periods prior to receiving the PPP Loan, be payable with PPP funds?
Hello did you find this answer? I’m interested as well.
What if you use less than 75% of your payroll?
the 75% is a little deceptive. You CANNOT use more than 25% on expenses other than Payroll. You can use all you want for payroll... up to 100%. But 100% is hard to get to... just how the numbers and the time limit works out. So if you use the max 25% on other expenses and only 60% on payroll... you would end up having to return the 15% or take out the loan at the end for the 15%. Hannah can correct me if im wrong, but pretty sure of this.
how do you compete with unemployment extra 600? still being forced to stay closed but if you get ppp loan and you want to at least use it to pay rent and utilities?
I agree - it is difficult - video coming out soon on this. You can use it for those purposes, but you won't be able to claim forgiveness on the funds because you aren't reaching the threshold of 75% payroll costs.
@@ClaraCFO I have the same problem, got the loan and nobody to pay because my employees are collecting unemployment +$600 and don't want to come back to work.
Arek Bialobrzeski
Do employees have an option to go back to work because the employer now has a loan ?
Vianette Alvarez Yes, I have work for those employees.
Can I pay my employees their regular wages AND The $600/week so they’ll come back to work? We are a restaurant and none of them will come back - until I actually offered them the $600.
Is the money to be used for April & may or for June & july? I just got the money last Friday, May 29th.
Make sure you check out all the PPP videos. It explains the "covered period concept".
I made a mistake on my application and asked for more money than I was supposed to. They ended up paying me the whole amount I asked for, what should I do?
Give the money back? Hire more people? Give my current staff a raise?
I'd talk to your bank and see if you can lower your loan amount.
why wouldn't healthcare premiums be included for the owners of an llc if in fact they are part of the owner compensation replacement? on your spreadsheet you have health insurance coverage for employees(not business owner)? should that be on other payroll costs?
SBA guidance on April 14th took away the health and retirement benefits for the owners of Sole Proprietors and SMLLC. But the expense paid on these to employees only can be use for forgiveness. This was done to keep owners with NO employees from getting a unfair windfall by almost being guaranteed to forgive 100%. Makes sense.
Hello I like this video Channels thanks for all the information.
thank you!
I’m an LLC S Corporation business. I run it out of my home. I’m paid salary and the rest of my employees are paid part-time. I have group insurance through my business for myself since I’m the only one who is full time. Can I claim that? Also, what about my utilities such as business phone Rent ext? I’m in Illinois so I’m not sure if that applies? Thank you for all your information. It has helped me clear up a bunch of questions.
Brenda - since you are an S-corp, yes, you can include your health insurance. Schedule C owners cannot, but you can.
@@ClaraCFO Can you provide a source for this?
If I not use ppp loan for payroll cost can I keep it and pay 1percent interest on it?
Thanks for your video ! Blessed ..
Happy to help
Plan on reaching out at some point for some more guidance..
Can we give our employees an hourly "hazard pay" increase?
yes
I still need to pay my 1st QTR MA Unemployment Insurance Tax, can this payment be included in payroll costs that can be forgiven?
Likely not, unfortunately!
thank you for the information. i have some questions need your help please. 1. 75% cost of payroll means the employees salary with their tax part right? i have some confusion on this part. 2. as of covid-19 some people are not able to work, so we have to hire new workers. can i use payroll protection money to new workers?
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
Are state withholding taxes included as payroll costs?
The employer side of state taxes are included in payroll costs.
Great video, I have one big question. What if a company wants to pay employees/employee more money say in bonuses/extra hours to have more forgiveness? Do you have an opinion which way the SBA will side on paying more than 2019 figures.
100% of the loan can go to forgiveness for employee payroll costs as long as you don't reduce staff hours by more 25% or reduce staff. However if you want to use it for rent or utilities only 25% can go towards that.
You can't get more than 100% for forgiveness.
Thank you Clara After listening to your presentation i figured that the entire PPP ist a big lie. We have (really) received our money grant on Monaday the 4th. Our payroll and rents are always due on the 30th and 1st. The 4th of may plus 8 weeks are the 22nd of june. That means i can get forgiven ONLY one payroll and one rent and the rest is just for nothing because it will be paid 8 days after the PP ends. Am I right? What a rip off !!!
Excellent resource, Hannah!
Thanks HR Answers!
Very good information. Thank you!
Thanks for watching Karen!
You have to spend the money 8 weeks after you received the deposit for the ppp loan ?
I received my funding for PPP on April 23.Eight weeks of payroll will take me to June 18th. If my business is still not open do I need to keep my employees until June 30th?
If you want the loan forgiven, then probably yes Jerome. This loan may not be the best fit for everyone's situation, so you will need to consider what's best for your business!
@@ClaraCFO It wasn't clear if the immediate use of the money for eight weeks took precedent over employee retention until June 30. Since I am closed now, would it make sense to wait a week or 2 to bring back the employees? Thanks for your reply.
Thanks Clara, I learned so much from you today. Keep it up
You're so welcome!
Can I cashed payroll checks from last year?
So at least 75% on the money spend from the ppp loan has to be payroll if I’m understanding correctly? I have to spend it in payroll 75% for the loan to be forgiven. If I have 50% payroll and 50% othe operational expenses that will not be accepted. I’m confused, help please
if my ppp is 2000 and eidl is 2000, then does that mean they cancel out since eidl reduces ppp (assuming ppp and eidl is used independent & separately & accurately)?...i'm so confused, can you help?!
If your EIDL Grant is $2000 and your PPP is $2000, then this means that you have have a total of $2,000 forgiven. So you can use the PPP money and the grant money, but only $2,000 total will be forgiven....regardless of what you spend it on
@@ClaraCFO Thanks! It sounds smart then not to take eidl since it will effect my full amount of ppp. If I'm understanding correctly, say if PPP is higher at $4000 then it has a chance of possibly being fully forgiven if used correctly, however by taking eidl of $2000 then i've essentially taken my chance of complete approval and will need to pay back at least $2000- am i correct?
Hi Clara, I have a small business.
I’m a LLC company. I have a couple employees on payroll, but always filed a schedule C for my personal income at the end of the year. Can I write myself a paycheck as part of the 75%? That will then be forgiven? I did use my schedule C income from 2019 to help figure out my loan amount. Thanks
i am a dentist who owns a dental clinic. can i use ppp to pay additional PPE (personal protection equipment) . what category of on your excel sheet should i allocate this additional expense. good excel sheet thx you. i am thinking utility? maybe?
Hi Edward - I haven't seen anything in PPP documentation about covering PPE. However, I know the CARES act on a broader basis has provisions for PPE. I, personally, am unfamiliar with that part of the act though!
I got the eidl grant earlier than the PPP loan. Can I use all the grant money to pay restaurant food cost and insurance first, and then use the PPP money next, both money can be forgiven?
If you got the EIDL grant, it will offset the total forgiveable amount of the PPP. But you can use it for food costs and insurance! You can't cover those things with the PPP, so that's a great use of the money!
Clara CFO Group
It’s very kind of u to reply the message, thanks.
On ur video said it’s better not increase the payroll the people u keep during the business is closed, how about we open the business on May, can I increase?
I mean is it ok to increase payroll for the employees?
Are the health insurance premiums part of the payroll cost (75%) or part of the 25% (utilities, rent, etc...)?
Part of the payroll
Can I rehired furloughed workers and claim Employee Retention Credit for them?
Can i get PPP to put up a business instead? Which application should i get for starting a business? Thanks.
Thank you for your question. Unfortunately, we can't answer all of the specific questions we receive. We encourage you to check out the other Small Business PPP/EIDL videos posted in our channel as well as the resources we’ve compiled here: learn.claracfo.com
The Citi bank wants me to sign a loan note before ppp fund is released. Do I have to pay 10% interest when the note is due? I am the officer of the company, and I am the only employee of this company. Thank you very much if you could respond to me
Is the 75% payroll requirement based on total amount of loan, or amount of loan actually spent? If I borrow 200,00 but use 160,000, and give the rest back, is the 75% based on the original 200,000, or the 160,000 actually used.
There is no limit on how much you can use for payroll. You just cant use more than 25% of the loan for other approved expenses. You cannot raise wages or bonuses. Any difference, just pay it back.
Hi. Our 8 weeks are up and I gathered all the documents and completed the EZ Forgiveness form. Where do I submit these documents?
You'll have to contact your loan provider.
Is “employer liability” cost forgivable?
Liabilities are inherently something that you owe but haven't paid yet. I am not sure what this would be!