Paycheck Protection Program General Information

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.

Loan Information

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

Loan amount

The loan is basically your average Gross payroll including group health insurance premiums in the past 12 months, multiplied by 2.5. Example: If the gross wages shown on your 2019 Form 940. Gross payroll also includes payments with 1099. However, the excess paid to anyone over $100,000 should be subtracted from the gross payroll.

When to apply

Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.

Who Can Apply

The following entities affected by Coronavirus (COVID-19) may be eligible:

Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:

  • 500 employees, or
  • That meets the SBA industry size standard if more than 500
  • Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
  • Sole proprietors, independent contractors, and self-employed persons.

Loan Details and Forgiveness

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

This loan has a maturity of 2 years and an interest rate of 1%.

Information Needed

Banks and approved lenders will ask for the following:

  • Average Gross Payroll for the past 12 months. Usually the total wages shown on your Form 940 for 2019.
  • 2019 and 2020 Payroll register, Federal and State payroll reports may include Forms 941, 940 and SUTA
  • Loan certification that funds will be used to pay for payroll to retain employees during the COVID-19 crisis.

IRS to revoke passports for individuals with significant tax debts

Passport Revoked

The Internal Revenue Service today urged taxpayers to resolve their significant tax debts to avoid putting their passports in jeopardy. They should contact the IRS now to avoid delays in their travel plans later.

Under the Fixing America’s Surface Transportation (FAST) Act, the IRS notifies the State Department (State) of taxpayers certified as owing a seriously delinquent tax debt, which is currently $52,000 or more. The law then requires State to deny their passport application or renewal. If a taxpayer currently has a valid passport, State may revoke the passport or limit a taxpayer’s ability to travel outside the United States.

When the IRS certifies a taxpayer to State as owing a seriously delinquent tax debt, the taxpayer receives a Notice CP508C from the IRS. The notice explains what steps the taxpayer needs to take to resolve the debt. IRS telephone assistors can help taxpayers resolve the debt. For example, they can help taxpayers set up a payment plan or make them aware of other payment options. Taxpayers should not delay because some resolutions take longer than others.

Don’t Delay!
It’s especially important for taxpayers with imminent travel plans who have had their passport applications denied by State to call the IRS promptly. The IRS can help taxpayers resolve their tax issues and expedite reversal of their certification to State. When expedited, the IRS can generally shorten the 30 days processing time by 14 to 21 days. For expedited reversal of their certification, taxpayers will need to inform the IRS that they have travel scheduled within 45 days or that they live abroad.

For expedited treatment, taxpayers must provide the following documents to the IRS:

Proof of travel. This can be a flight itinerary, hotel reservation, cruise ticket, international car insurance or other document showing location and approximate date of travel or time-sensitive need for a passport.
Copy of letter from State denying their passport application or revoking their passport. State has sole authority to issue, limit, deny or revoke a passport.
The IRS may ask State to exercise its authority to revoke a taxpayer’s passport. For example, the IRS may recommend revocation if the IRS had reversed a taxpayer’s certification because of their promise to pay, and they failed to pay. The IRS may also ask State to revoke a passport if the taxpayer could use offshore activities or interests to resolve their debt but chooses not to.

Before contacting State about revoking a taxpayer’s passport, the IRS will send Letter 6152, Notice of Intent to Request U.S. Department of State Revoke Your Passport, to the taxpayer to let them know what the IRS intends to do and give them another opportunity to resolve their debts . Taxpayers must call the IRS within 30 days from the date of the letter. Generally, the IRS will not recommend revoking a taxpayer’s passport if the taxpayer is making a good-faith attempt to resolve their tax debts. Read More

Truckers should e-file highway use tax return by September 3

Trucking Form 2290

The Internal Revenue Service today issued a reminder for owners of most heavy highway vehicles that the time to file Form 2290, Heavy Highway Vehicle Use Tax Return, began July 1, 2019.

The highway use tax applies to highway motor vehicles with a taxable gross weight of 55,000 pounds or more. This generally includes large trucks, truck tractors and buses. The tax is based on the weight of the vehicle and a variety of special rules apply. These special rules are explained in the instructions to Form 2290.

In 2019, the IRS expects to receive almost 900,000 Heavy Highway Vehicle Use Tax Returns. Though some taxpayers have the option of filing Form 2290 on paper, taxpayers with 25 or more taxed vehicles must e-file Form 2290.

The deadline to file Form 2290 and pay the tax is September 3, 2019, for vehicles used on the road during July. Truckers have the additional time since the normal deadline of August 31 falls on a Saturday this year and Monday, September 2, is a federal holiday.

The IRS encourages all owners to take advantage of the speed and convenience of e-file and paying any tax due. There is no need to visit an IRS office because the form can be filed and any required tax payment can be made online. Filers can use a credit or debit card to pay the Heavy Highway Vehicle Use Tax. Visit IRS.gov for a list of IRS-approved e-file providers and to find an approved provider for Form 2290 on the 2290 e-file partner’s page.

Generally, e-filers receive their IRS-stamped Schedule 1 electronically minutes after filing. They can then print the Schedule 1 and provide it to their state department of motor vehicles, without visiting an IRS office. Read More

Tax Reform 2018 Explained

Starting with Tax Year 2018 (Jan.-Dec. 2018), tax forms and schedules are changing due to Tax Reform. Tax Forms as we know them are being cut off and split up in schedules.

The House (again) approved the final version of the most sweeping rewrite of the tax code in more than 30 years. The tax bill previously passed the House — it was a 227-203 vote, no Democrats supported the bill — on Dec. 19. Then, the Senate passed the final version of the $1.5 trillion tax bill in the early hours of the morning Wednesday, Dec. 20. The vote was 51-48 along party lines.

Officially, the new name of the bill is “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”, but it’s been called the Tax Cuts and Jobs Act since it was introduced back in November 2017. The Senate parliamentarian ruled the bill’s name and two other provisions — one that would have allowed parents to pay for homeschooling with money from 529 savings accounts and another that was part of criteria used to determine which colleges would qualify for a new excise tax — had to change else the bill would violate the budget rules Senate Republicans have to follow to pass their bill through a process that prevents Democrats from filibustering.

What’s changing— and what isn’t

  • 529 college savings plans
  • ACA individual mandate
  • Alimony
  • Alternative minimum tax
  • Bicycle commuting
  • Child tax credit
  • Corporate taxes
  • Estate taxes
  • Gains made on home sales
  • Medical expenses
  • Miscellaneous tax deductions
  • Mortgage and home equity loan interest deduction
  • Moving expenses
  • Pass-through businesses
  • Personal casualty or theft
  • Personal exemptions
  • Standard deductions
  • State and local tax (SALT) deduction
  • Student loan debt discharge
  • Tax brackets and income taxes