Are we there yet?

Some of our clients’ businesses are able to get back to work this month after weeks of being shut down. This is such a relief on so many levels! Yet our work continues on many fronts. And we are here to help.

We continue to wash hands, wear masks, keep six feet of distance, and avoid crowds in our efforts to slow the spread of disease and protect those who are vulnerable and at risk. Most or many of us are staying this course, but not all. Any many are wondering how long this might continue. Or should continue. Has the virus been beaten? Are we there yet?

While we’re certainly not infectious disease specialists, we are able to help with the bookkeeping and accounting related to the pandemic stimulus and support funds.

Paycheck Protection Program (PPP)

For employers who have received Paycheck Protection Program (PPP) funds, we have two areas of clarification for you.

First, employees can receive one or the other – Federal Pandemic Unemployment Compensation (FPUC) or PPP wages from the employer.

Here’s how it works:

• during the 8 weeks that employees receive PPP paychecks, they indicate that in their weekly claim with state unemployment (and they will not receive unemployment benefits then)
• after the 8 weeks, they do go back to filing their weekly claims for unemployment
• the $600/week FPUC was retroactive to 3/29 and goes through 7/25.

Second, we have recommendations on how to records those PPP funds in your books. Enter the funds received as “PPP Loan” (a new loan account of the type “Other Current Liability”) in your books. Only after the loan is forgiven, then move the (qualifying) amount to an “Other Income” or “Grant Income” account.

The above method could be applied to recording EIDL loan or grant money, too.

CARES Act Payroll Settings & Payroll Tax Credits

For our clients using our payroll service through Intuit Online Payroll / managepayroll.com, there are CARES Act payroll settings available.

This is important for those of you who have NOT received PPP funds and are still paying employees under closure orders or at least 50% reduced gross receipts. 

Generally, if your business meets these requirements, you may be eligible to receive a tax credit that includes, but is not limited to:

• A refundable tax credit for up to 50% of the total wages paid to employees during the closure.
• The maximum you can receive is $10,000 of wages ($5,000 of credits) per employee.

Nicely summarized more details here. This is an amazing tax credit if you are unable to receive PPP funds.

To make sure this tax credit is recorded correctly in your payroll taxes, managepayroll.com has set up special pay types. Do contact us if you need any help with these special pay types, even if it’s retroactive, and we are happy to help.

Some times, just having a supportive team makes all the difference in keeping the overwhelm at bay. And with luck, we’ll be on the other side, soon, looking at just how far we’ve come.

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