The PPP Thread

[Rthoma23]

This is where a competent CPA should be providing guidance to the group.

The CPA's are waiting on more guidance from Small Business Association, just like the rest of us. If you are owner of an S-corp, and you pay yourself a W2 salary, it seems pretty clear that your salary (up to $100k) can count towards "payroll expenses" in determining max loan amount.

If you are a sole proprietor, it seems clear that compensation you receive that is subject to self-employment tax (up to $100k) can also count towards "payroll expenses"

I have not seen any guidance on partnerships or multi-member LLC's that are regarded as partnerships for tax purposes. In these cases do owner members' salaries count as "payroll expenses?" One could argue that all members'/partners' compensation subject to SE tax should count as eligible "payroll expenses" but this is not explicitly been addressed.

Anyone seen anything different?

[childay]

Based on spirit of the law I would assume there would be a process whereby the whole entity could apply for the loan which would include employee payroll amounts and some form of compensation amount for the physician owners even if it's a partnership of S Corps.

This is where a competent CPA should be providing guidance to the group.

Not sure most CPAs or lenders are all that more informed than us internet nerds. Whole thing seems a cluster

[jacoavlu]

The CPA's are waiting on more guidance from Small Business Association, just like the rest of us. If you are owner of an S-corp, and you pay yourself a W2 salary, it seems pretty clear that your salary (up to $100k) can count towards "payroll expenses" in determining max loan amount.

If you are a sole proprietor, it seems clear that compensation you receive that is subject to self-employment tax (up to $100k) can also count towards "payroll expenses"

I have not seen any guidance on partnerships or multi-member LLC's that are regarded as partnerships for tax purposes. In these cases do owner members' salaries count as "payroll expenses?" One could argue that all members'/partners' compensation subject to SE tax should count as eligible "payroll expenses" but this is not explicitly been addressed.

Anyone seen anything different?

If this applied to my situation I would research the PPP affiliation rules.

[childay]

Do I count partnership guaranteed payments? What about S-Corp distributions?
The regulation says “salary, wages, commissions, or similar compensation.” I read the catch all of “similar compensation” to include both of these payments. Your lender may have a different perspective, so you should definitely ask her or him.

https://www.forbes.com/sites/brianthompson1/2020/04/05/how-to-calculate-payroll-costs-for-your-paycheck-protection-program-loan/#c501be73710b

Hmm..

[jacoavlu]

Not sure most CPAs or lenders are all that more informed than us internet nerds. Whole thing seems a cluster

"most" you're almost certainly correct. But there are some CPA firms and others that are trying to stay ahead of this and provide value to their clients.

[jfoxcpacfp]

"most" you're almost certainly correct. But there are some CPA firms and others that are trying to stay ahead of this and provide value to their clients.

Both you and childay are right. The stimulus is a cluster "mess" to sort out. Our 3 senior CPAs in-house are working on finishing the 3rd client ltr to send in 3 wks on this whole situation. But we're a tiny firm and it's also tax season - we are being bombarded just trying to get tax returns done, client questions answered and communicating to clients to make sure they get in line for $$ if they qualify. And worried that city code enforcement is going to knock on our door any day and tell us all we have to go home because we have >10 employees here. So cut the CPA firms a little slack.

Of course, we all realize there is never a good time to hold a pandemic. And the doctors and patients are the true sufferers, I am blessed.

[GastroMastro]

according to Pence as of 4p EST today 20% of the $349B ppp money has been disbursed

https://twitter.com/mike_pence/statu...058829827?s=21

Do people believe that?

[Tim]

Do people believe that?

I thought from the beginning there were word games. Processed doesn't me funds sent out. Disbursed is believable.

[formerly_cn]

How does this apply to partnerships / s-corps? Spouse's partnership group applying for their employees payrolls. My understanding, K1 income / distributions cannot be used which makes sense. We are considering applying for spouse's W2 payroll under her single member s-corp. Question 3 on the application makes me wonder

Spouses S Corp is eligible the way I'm reading this.

may be they will come back and deny it but its worth applying. I would though if I were in your situation.

Also if anyone is struggling with their banks dragging their heels getting this program going, there are online lenders/aggregators now partnering with SBA. Google Kabbage (they are long time Small business lenders). I may be using them for one of my business if local bank keeps "waiting for guidance"

I don't think taking pressure and applying hurriedly is the right thing, however, constant mnuchin and pence tweets about x% already funded (while majority of folks I know getting diddly sqaut ) has me worried.

Stressful!

[childay]

Both you and childay are right. The stimulus is a cluster "mess" to sort out. Our 3 senior CPAs in-house are working on finishing the 3rd client ltr to send in 3 wks on this whole situation. But we're a tiny firm and it's also tax season - we are being bombarded just trying to get tax returns done, client questions answered and communicating to clients to make sure they get in line for $$ if they qualify. And worried that city code enforcement is going to knock on our door any day and tell us all we have to go home because we have >10 employees here. So cut the CPA firms a little slack.

Of course, we all realize there is never a good time to hold a pandemic. And the doctors and patients are the true sufferers, I am blessed.

No offense intended to CPAs if any taken. Obviously bad time to have some crazy new gov program without clear guidance
I have been busy/not paying enough attention and my own very small town CPA was almost immediately responsive today when I broached the subject

[childay]

may be they will come back and deny it but its worth applying. I would though if I were in your situation.

What I'm thinking as well. Doesn't hurt to apply

[jacoavlu]

What I'm thinking as well. Doesn't hurt to apply

Except if the business should apply as one big group covering everyone, that’s what you should do. I don’t know what is right. But someone knows.

[abds]

Do people believe that?

I believe 20% of money has been allocated/reserved. I do not believe that $70B has been distributed.

[jfoxcpacfp]

No offense intended to CPAs if any taken. Obviously bad time to have some crazy new gov program without clear guidance
I have been busy/not paying enough attention and my own very small town CPA was almost immediately responsive today when I broached the subject

Glad to hear about your experience and no offense taken. You’re sweet to say that, though. Often, CPAs deserve the criticism. Just want you folks to consider the circumstances. I’m working 60-70 hr weeks (and still hardly have time to post here.) LOL, hope I don’t get my mod cred’s taken away, but I guess that goes into the list of least of my worries!

[jacoavlu]

Here’s a pretty simple calculator

https://www.mygrowthlab.com/