CARES Act: Navigating the Interplay Between PPP Loans and Employer Tax Relief
Since the CARES Act (Act) was signed into law on March 27, 2020, a second round of funding under the Small Business Administration's (SBA) Paycheck Protection Program (PPP) brought the total emergency funds available to small businesses across the United States to nearly $600 billion. The SBA and Internal Revenue Service (IRS) have also released numerous pieces of supplemental guidance and interim rules related to the PPP and the Act's tax provisions. Coupled with technological glitches, ever-developing legal issues and fast-emptying funds, many small business owners are faced with questions about exactly how PPP loans interact with the Act's employment tax provisions and what relief is available with or without obtaining a PPP loan.
White and Williams' Ryan Udell, John Eagan and Stephen Bowers and EisnerAmper's Roger Davis and Carolyn Dolci discuss the interplay between PPP loans, employment tax payment deferrals (Deferral) and the employee retention credit (Credit), as well as strategies for businesses that were denied or did not apply for PPP loans. Topics of discussion include:
- Current status of the PPP loan program and eligibility for a PPP loan
- IRS Notice 2020-32 and loss of tax deduction for expenses associated with PPP loan forgiveness
- Overview of the Credit and the Deferral, including IRS guidance
- Impact of full-time and part-time employment status on the Credit and the Deferral
- Availability of the Credit and the Deferral for businesses with a PPP loan or PPP loan forgiveness