Table of Contents
- SBA Forgivable Loans – Paycheck Protection Program (PPP) - Additional Funding
- SBA Forgivable Loans – Paycheck Protection Program (PPP) - Next Steps
- Economic Injury Disaster Loans (EIDL) for Ag Companies up to $10,000
- Iowa Targeted Small Business Sole Operator Fund
- Iowa Small Business Relief Fund
- Iowa Business Recovery Assistance
- Filing for Unemployment
- CARES Act – Very Brief Summary of Changes
- Tax Deadlines Changed Due to COVID-19
- Changes to Our Office Environment
SBA Forgivable Loans – Paycheck Protection Program (PPP)
Apply Immediately – Additional Funding Allocated
The Coronavirus Aid, Relief, and Economic Security (CARES) Act originally allocated $349 billion (additional $310 billion added to funding) to help small businesses keep workers employed by providing funding for up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and eligible utilities. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payroll afterward. Businesses began applying on Friday, April 3rd. We strongly encourage applying as soon as possible by contacting your local lender to complete the brief two-page application. Members of our professional staff have attended multiple webinars to learn more about PPP. We have been working closely with clients and lenders to provide information needed for your application. Please contact our office if we can answer any questions or provide payroll information required for the application.
Eligible entities – if they meet program size standards:
- Schedule C – Sole proprietor – Profit from Business and/or paying wages to employees
- Schedule F – Sole proprietor – Profit from Farming and/or paying wages to employees
- Form 1065 – Partnerships
- Form 1120S – Sub S Corporation
- Form 1120 – C Corporation
- Form 990 – Eligible Nonprofit Organizations
- Paycheck Protection Program (PPP) Application Form and Information for Borrowers. Treasury Department
Paycheck Protection Program (PPP) Application Form and Information for Borrowers. Treasury Department
SBA Forgivable Loans – Paycheck Protection Program (PPP)
Next steps if you have received a PPP Loan & important new guidance on loan forgiveness calculations including the loan forgiveness application
If you or your business has received a PPP loan it is critical to discuss forgiveness documentation and planning with our office before your loan 8-week time period expires.
To get started:
- Contact our office as soon as possible after the loan is received.
- Provide a copy of your PPP application to our office.
- Discuss a forgiveness strategy with us.
- We can provide you a sample forgiveness documentation Excel spreadsheet to assist in the process.
- We will work with you and your lender to help provide required documentation for loan forgiveness.
There is no 100% guarantee of PPP loan forgiveness, but planning and documentation are essential parts of the process.
PPP Forgiveness Guidance – Several new rules regarding eligible expenses potentially qualifying for loan forgiveness & related calculations have been issued including:
- Owner’s compensation can not exceed 8/52 of 2019 wages
- Payroll costs incurred (relating to the day that an employee’s pay is earned) but not paid by the end of the covered period are eligible for forgiveness if paid on or before the next regular payroll date (even if the date falls outside of the covered period).
- Borrowers with a biweekly (or more frequent) payroll can elect to track payroll expenses using an alternative eight-week period (called the “alternative payroll covered period”) beginning on the first day of their first pay period following their PPP loan disbursement date.
- The new application appears to permit bonuses to non-owner employees but the total payroll for a single employee is limited to $15,385 during the 8-week covered period.
- FTE’s (Full time equivalent employees) – There are options to select for the time frame to measure FTE’s. This may be more beneficial than using the number of employees listed on the original application.
- At least 75% of the loan proceeds must be used to pay payroll costs.
- A borrower computes an employee’s average annual salary or hourly wage during the covered period (or alternative covered period) and compares the result to the average annual salary for the period between January 1 and March 31, 2020. Any reduction will affect loan forgiveness but borrowers restoring any salary or wage reductions by certain time periods can avoid this forgiveness reduction.
- The new application appears to require that employer contributions for health insurance and retirement plans be paid during the covered period in order to count as eligible payroll expenses.
- Up to 25% of the eligible costs can relate to non-payroll expenses including certain utility payments, certain rent obligations and payments of qualifying interest on business mortgage obligations.
On U.S. Treasury website, read the loan forgiveness application located under Tools – For Borrowers. Use this link and scroll down their page Treasury Department - Payroll Protection Program Information
On U.S. Treasury website, read the “Interim Final Rule on Loan Forgiveness” under Tools – Program Rules. Use this link and scroll down their page Treasury Department - Payroll Protection Program Information
The forgiveness guidance is being updated constantly, additional rules are being proposed by Congress and many questions remain unanswered by SBA and the Treasury Department.
Economic Injury Disaster Loans (EIDL) for Ag Companies up to $10,000 – Apply Immediately
Agricultural businesses are now eligible for the SBA's Economic Injury Disaster Loan and EIDL Advance program. The SBA will begin accepting new EIDL applications on a limited basis only, in order to provide unprecedented relief to U.S. agricultural businesses. SBA Economic Injury Disaster Loan and Advance Information & Application
Iowa Targeted Small Business Sole Operator Fund (Updated) – All grants have been awarded as of May 4, 2020
On Monday, March 23, Governor Reynolds announced a Targeted Small Business Sole Operator Fund that provided financial assistance to targeted small businesses with zero employees that have been economically impacted by the COVID-19 pandemic. The application deadline was Friday, April 10th. Grants awarded have been posted at Iowa Economic Development Targeted Small Business Sole Operator Fund Grant Recipients (PDF)
Iowa Small Business Relief Fund (Updated) – Grants awards have continued based on original applications
On Monday, March 23, Governor Reynolds announced a new Iowa Small Business Relief Program that will provide financial assistance to small businesses and tax deferrals to any Iowa businesses that have been economically impacted by the COVID-19 pandemic. The application deadline was Tuesday, March 31, at 12 p.m. Per Iowa Economic Development, applications are being reviewed and applicants will be notified of award decisions via email. If awarded, a two-page contract will be sent to the applicant to be completed electronically. Checks for grants will be issued after the contract is submitted. This Iowa program started with potential grant funds available of $4,000,000 was expanded to $24,000,000 and has continued to receive additional funding. Our staff worked diligently to contact clients and assist in completing applications. Grants awarded have been posted at Iowa Small Business Relief Awards
Iowa Business Recovery Assistance – Additional Resources & Information - Iowa Economic Development
Filing for Unemployment
Should I file for unemployment? (Updated)
Iowa Workforce Development has information on their website to assist employers and employees related to the impact of COVID-19. If you are the owner of a Sub S corporation and you are paid wages you may be eligible for benefits. Iowa Workforce Development
If you are self- employed, unemployment benefit option information is available. Video by Iowa Workforce Development - How to File for Unemployment Benefits if You're Self Employed
CARES Act – Very Brief Summary of Changes
- Rebate checks or tax credit of up to $1,200 per qualified individual and $500 per child under age 17. This is subject to income limitations. Most individuals entitled to the rebate do not have to do anything. If your bank account information was included on your most recent tax return you may receive the economic recovery rebate as a direct deposit. Paper checks are schedule to be mailed in May 2020 for other eligible taxpayers. IRS - Check on the status of your Economic Impact Payment
- $300 above-the-line charitable contribution deduction for 2020 – Keep a record of your donations
- Exclusion from income for student loan repayment by your employer up to $5,250
- Required minimum distributions from retirement plans waived for 2020
- Waiver of 10% penalty for early withdrawals from retirement plan for COVID-19 related distribution up to $100,000 for a limited time to qualified individuals only.
- Option to defer payment of the employer share (6.2%) of the social security tax due in 2020, effective for payments due after the date of enactment. 50% of the deferred payroll taxes is due on 12/31/21 and 12/31/22.
- Self-employed individuals may also delay paying the social security portion of their SE tax for 2020.
- Refundable payroll tax credit for 50% of wages, including health benefits, up to $10,000 paid to each eligible employee during the COVID-19 crisis (3/1/20 to 12/31/20) based on the following criteria:
- Operations were fully or partially suspended, due to COVID-19 related shut-down order OR
- Gross receipts declined by more than 50% when compared to the same quarter in the prior year
- Net operating loss (NOL) from 2018, 2019 and 2020 may be carried back 5 years. We will work to analyze potential amended tax returns in the summer of 2020.
- Certain qualified business improvement property is eligible for bonus depreciation. We will work to analyze potential amended tax returns in the summer of 2020.
Tax Deadlines Changed Due to COVID-19
The Federal tax due date for filing has changed to July 15th and the Iowa tax due date for filing has changed to July 31st. We expect other states to continue to revise their tax due dates.
The following types of tax returns are affected:
- Non-Profit Organizations
If we have completed your individual tax return, please sign the electronic forms and return to our office as soon as possible. Do not wait to sign the forms. When we receive your signed forms, we will e-file your tax return.
When are 2020 Federal quarterly estimated tax payments due? (Updated)
The due date of the first and second 2020 Federal individual quarterly tax estimates has changed to July 15th.
When are 2020 Iowa quarterly estimated tax payments due? (Updated)
The due date for the 1st 2020 Iowa individual quarterly tax estimate remains April 30th and has not changed to July 31st (as previously reported). The second 2020 individual tax estimate remains at the original due date of June 30th. We are printing the estimate instructions with the due dates available at the time the tax return was printed.
Has the due date changed for funding 2019 IRA’s (Individual Retirement Accounts) and HSA’s (Health Savings Accounts)?
The due date has changed to July 15th.
When can I expect my tax refund?
Normally, Federal refunds are directly deposited two weeks after the return is accepted. Direct deposit of Iowa refunds can be delayed up to six weeks.
Have my Federal student loan payments changed? (Updated)
The Department of Education has information regarding the waiver of interest on student loans held by Federal government agencies. Federal student loan payments will automatically stop from March 13, 2020 through September 30, 2020. Student Aid Announcements
What is the New Law regarding Paid Leave and Employer Credits for COVID-19 Absences?
Please follow this link to read information about the new complicated requirements effective April 1st, 2020. Contact our office for guidance for your specific situation.
Families First Coronavirus Response Act – Questions and Answers from the US. Department of Labor DOL Pandemic Questions
The Department of Labor is continuing to add additional information and resources. DOL Pandemic Information
Additional Resources and Information
We will continue to post useful information on the Resources page of our website.
Changes to Our Office Environment
Effective Monday, June 1st
We are starting Phase I of reopening our office. We want to keep our employees and clients healthy.
Face-to-Face Client Meetings in the “Current Status” of Social Distancing
Due to the size of our individual offices, we have decided sit down appointments may now be scheduled with Laura Dawson or Donna Burkhardt. These appointments will be conducted as follows:
- We will call you at least one day prior to your appointment to discuss our office visitation policy including asking questions about any travel in the last 14 days to a domestic hotspot or out of the country or exposure to an individual with COVID19. As always, if you are sick please stay home.
- When you arrive for your appointment please stay in your vehicle. We have decided not to have clients wait in our reception area.
- Call our office when you arrive for your appointment and we will give you instructions.
- Hand sanitizer is available to use when you enter our building.
- We will practice social distancing guidelines during your appointment.
- You are welcome to wear a mask but it is not required.
- We will keep a list of visitors to our office for 14 days.
Brief in person appointments with any other accounting professionals will be conducted across the counter. The client will remain in our office waiting area and our staff member will remain 6 feet away behind a plexiglass barrier we have installed.
You may choose to have your professional call you for a scheduled phone appointment or we will simply call when we are working on your records.
We have posted a notice on our building entrance restricting any visitor that in the last 14 days has traveled to a domestic hotspot or out of the country. Our staff is working at our physical office location. Our other communication methods are by phone, email, mail and our online CPASafe. You may use our 24 hour drop off slot (located in our office foyer).
Document Sharing and Drop Off Information
Our online access, CPASafe, allows you to share documents quickly and securely with us. If you do not currently have a CPASafe login, please call or email our office and talk to Morgan or Jamie. We can easily setup this communication method for you. CPASafe is available using the “Client Login” on our website.
Document Pick Up
If you want to pick up your information at our office we have these instructions posted on our front door.
If you prefer to use the drop box slot in our foyer to pick up your information please call our office at 712.225.5755 when you arrive and we can provide your information by using the drop box slot.
After reading the sign on our front door, you can enter our office building and pick up your information at the counter in our client waiting area.
- If you are picking up a tax return please open the envelope & sign all signature forms included in your envelope.
- Return the signed forms.
- If our bill is included in your envelope please leave payment in our drop box or mail a check.
Please contact our office if you have questions. We are receiving information of changes daily and are here to help. We have missed seeing all of our clients but hope everyone is staying healthy and safe.
The Professional Team of 12 at Burkhardt & Dawson, CPAs
— Donna Burkhardt & Laura Dawson