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COVID-19 Relief Services

COVID-19 Relief Services

COVID-19 Relief Services Team Lead

Monica Reid, CPA, Senior Accountant

Ms. Monica Reid joined Altman, Rogers & Co. in September 2016. She completed her college education at the University of Montana with both a Bachelor of Science and Master’s Degrees in Accounting in May 2015 and July 2016, respectively. Although she grew up in Anchorage, she spent nearly two years working in the Soldotna office on both tax and audit engagements and later relocated to Anchorage to become a full-time auditor.

The Altman, Rogers & Co. staff, led by Monica, started working with local lenders immediately after the CARES Act was signed into law. Our firm, with its audit and tax experience, was identified as a valuable resource to help the community with the Paycheck Protection Program (PPP).

Initially, the program was changing constantly, but Monica and her team were up to the challenge. Monica received invaluable support from the firm, staff, and Nelida Irvine and Nancy Porzio at the SBA.

In early April 2020, some local financial institutions began to accept loan applications. The team worked vigorously to help as many client applications get submitted that day, and from that point on Monica worked closely with lender contacts and clients to identify solutions, whether it was assisting a client with finding a lender who would serve them to knowing what documentation would be most relevant based upon SBA guidance. This program generated more questions than answers early on, but Monica and the Altman, Rogers & Co. team collaborated and strived to be a leading CPA firm in PPP assistance and guidance.

Monica teamed up with local lawyer, Christy Lee, attorney and owner of the Law Offices of Christy Lee, P.C., and Marc Enzi, Enrolled Agent at Tax Solutions, and the three created their first panelist discussion webinar called “PPP FAQs” (see the “PPP Webinars” tab on this page). The team continues to collaborate and create content that helps not only Alaskan communities but also communities nationwide.

COVID-19 Relief Services

The nation was struck by the COVID-19 pandemic this year, and Alaskans were forced to deal with new financial uncertainties, including our small businesses. To help relieve the businesses hardest hit help retain their employees, a loan program, administered by the Small Business Administration (SBA), was established through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The Paycheck Protection Program (PPP) is designed to help small businesses avoid layoffs or salary reductions in their staff. The process for the program is divided into two parts: the loan application, and the loan forgiveness.

PPP Processes

PPP Loan Application

There are still funds available through the PPP. If you haven’t received your PPP loan money, talk to us today. The longer you wait, the shorter period of time you will have available to use the funds and have the loan forgiven in some capacity. The current deadline is August 8, 2020.

We can help you find a financial institution that will accept your application. While we do not charge for our services for the application process, there is a fee for assisting with the forgiveness of the PPP loan.

See the application form here.

Even if you do not think you will need the funds to retain your employees or help with additional eligible operating expenditures, apply. The financial impact of the pandemic will reach beyond 2020.

PPP Loan Forgiveness

There are two coverage periods for the loan forgiveness periods that can be chosen from: the original eight (8) week period and the current twenty-four (24) week period.

There are two forms to choose from when applying for loan forgiveness through the PPP: the original Loan Forgiveness Application Form 3508 and the Loan Forgiveness Application Form 3508EZ.

Click here for the instructions for the Loan Forgiveness Application Form 3508.

Click here for the instructions for the Loan Forgiveness Application Form 3508EZ.

FTE Calculation

Calculating the full-time employee equivalent (FTE) for the loan forgiveness application can be tedious and overwhelming. Unless you process payroll on a weekly basis, pulling the hours off a payroll summary report from QuickBooks can be misleading.

3508-EZ Application

If you want to use the EZ Application, you will need to do an FTE count for each week between January 1, 2020 and March 31, 2020. Only use this look back period if you want to use the EZ application.

3508 Application

There are three (3) options to choose from when calculating the FTE using the standard 3508 Application.

Option 1: February 15, 2019- June 30, 2019

Option 2: January 1, 2020- February 29, 2020

Option 3: Any consecutive twelve (12) weeks between May 1, 2019 and September 15, 2019.

 

How Can We Help You?

  • We are a leader in helping fellow Alaskans achieve their goals through better understanding of the PPP loan application and loan forgiveness processes.
  • We have experience in compliance audits, so we can help get you an auditor’s point-of-view to ensure that nothing is missed in the process.
  • Our tax professionals understand the forms required to meet the loan application and loan forgiveness requirements, and understand the tax implications of these loans.
  • We know how overwhelming the process is, and we have gained our clients’ trust through helping them to overcome the concerns that come with being audited by a governmental entity
  • We offer reasonable fees, as our goal is not to bring more financial hardship to our clients but to help them navigate these trying times.

COVID-19 Relief FAQ

Yes, but there are some requirements that need to be met in order to do this.

Yes. It was determined that the relationship of a crewmember, described in Section 3121(b)(20) of the Internal Revenue Code, and a fishing boat owner or operator is analogous to a joint venture or partnership for PPP purposes. As a result, a fishing boat owner may include compensation reported on Box 5 of IRS Form 1099-MISC and paid to a crewmember described in Section 3121(b)(20) of the IRC, up to $100,000 annualized, as a payroll cost in its PPP loan application.

No. If a fishing boat crewmember obtains his/ her own PPP loan and seeks forgiveness of that loan based in part on compensation from a particular fishing boat owner, the fishing boat owner cannot also obtain PPP loan forgiveness based on compensation paid to that same crewmember. This restriction applies only if the crewmember is performing services described in Section 3121(b)(20) of the IRC for the particular fishing boat owner. This restriction is necessary to prevent fishing boat owners and crewmembers from claiming forgiveness fro the same payroll costs. As a result, only the crewmember's PPP loan is eligible for forgiveness, and the owner may not obtain forgiveness for any payroll costs paid to the crewmember. The fishing boat owner is responsible for determining whether any of the crewmembers, during the covered period for loan forgiveness, received their own PPP loans. Due to the increased risk of duplicate payroll costs, PPP loans to fishing boat owners are more likely to be subjected to an SBA loan review.

The period beginning on the date of loan origination (disbursement date) and ending on the earlier of a) 24 weeks after disbursement or b) December 31, 2020.

Yes, you can still use the original/ old rule as long as you received your loan money BEFORE June 5, 2020.

1. How much money you have remaining to use from the loan? 2. If you had no drop in pay OR headcount then use 8 weeks. 3. Can you maintain the full-time employees (FTEs) for the entire 24 weeks? d. With 24 weeks, you can hire people to meet the FTE requirement and release them from payroll the next day (only with December 31, 2020 period end).

Yes, but not if you are an owner ``if 24 weeks can not exceed 2.5 months' worth of 2019 compensation or capped at $20,833``. Also, as long as 8 week weeks doesn't exceed 8 weeks of 2019 compensation for sole proprietors and partners capped at $15,385.

For both options, the 60% payroll/ 40% eligible non-payroll cost rule applies.

Ten (10) months after the last day of the covered period.

After you submit your SBA Form 2508 or 3508EZ (with applicable documents) to the lender who serviced your loan, the lender has sixty (60) days from receipt (of completed application) to make a decision regarding loan forgiveness to the SBA. The lender then requests for payment at the time of determination of loan forgiveness. The SBA will, subject to any SBA review of the loan or application, remit the appropriate forgiveness amount to the lender, plus an interest accrued through the date of payment, not later than ninety (90) days after the lender issues its decision to the SBA. The lender is responsible for notifying the borrower of remittance by the SBA of the loan forgiveness amount and on the date on which the full amount of the loan is eligible for forgiveness and remits the full amount to the lender.

Yes

When the date on which the amount of forgiveness determination by SBA is remitted to the lender. (Maximum 150 days; the bank has sixty (60) days and the SBA has ninety (90) days to notify you of your ending loan amount).

Nonpayroll costs include covered mortgage obligations (payments of mortgage interest not including prepaid interest or principal payments) on any business mortgage obligation on real or personal property incurred before February 15, 2020; covered rent obligations including business rent/ lease payments pursuant to lease agreements for real or personal property if in force before February 15, 2020; covered utility payments including business payments for a service for electricity, gas, water, telephone, transportation or internet access for which service began before February 15, 2020. An eligible nonpayroll cost must be paid during the Covered Period OR incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period. Eligible nonpayroll costs cannot exceed 40% of the total forgiveness amount.

Interest payments on debt obligations that were incurred before February 15, 2020 other than covered mortgage obligations: payments of mortgage interest (not including prepaid interest or principal payment) on any business mortgage obligation on real or personal property incurred before February 15, 2020.

No. Expenses needs to be incurred and paid during the covered period to be forgiven. With that said, there are open issues on whether payroll costs are deemed incurred and paid when funds are released to a third party payroll provider, or on the date it is paid to the employee. Most businesses are planning to take the former position unless contrary guidance is released in the interim.

No. We do not recommend this unless you are already contributing, and the expenses must be for the covered period.

Sole proprietors, independent contractors, and self-employed individuals who had no employees at the time of the PPP loan application and did not include any employee salaries in the computation of average monthly payroll in the Borrower Application Form automatically qualify to use the Loan Forgiveness Application Form 3508EZ or lender equivalent and should complete that application.

The borrower should only take into account decreases in salaries or wages.

In calculating its loan forgiveness amount, a borrower may exclude any reduction in FTE employees if the borrower is able to document in good faith the following: (1) an inability to rehire individuals who were employees of the borrower on February 15, 2020 and (2) an inability to hire similarly qualified individuals for unfilled positions on or before December 31, 2020. Borrowers are required to inform the applicable state unemployment insurance office of any employee's rejected rehire offer within thirty (30) days of the employee's rejection of the offer. The documents that borrowers should maintain to show compliance with this exemption include the written offer to rehire an individual, a written record of the offer's rejection, and a written record of efforts to hire a similarly qualified individual.

Yes. The entire electricity bill payment is eligible for loan forgiveness (even if charges are invoiced separately), including supply charges, distribution charges, and other charges such as gross receipts taxes.

No. Payments of interest on business mortgages on real or personal property (such as an auto loan) are eligible for loan forgiveness. Interest on unsecured credit is not eligible for loan forgiveness because the loan is not secured by real or personal property. Although interest on unsecured credit incurred before February 15, 2020 is a permissible use of PPP loan proceeds, this expense is not eligible for forgiveness.

Yes. Example: A borrower received its loan before June 5, 2020 and elects to use a 24- week Covered Period. The borrower's Covered Period runs from Monday, April 20 through Sunday, October 4. The borrower has a bi-weekly payroll cycle with a cycle ending on Saturday, April 18. The borrower will not make the corresponding payroll payment until Friday, April 24. While these payroll costs were not incurred during the Covered Period, they were paid during the Covered Period and are therefore eligible for loan forgiveness.

A service for the distribution of transportation refers to transportation utility fees assessed by state and local governments. Payment of these fees by the borrower is eligible for loan forgiveness.

Fees

Our fees are based on the size of the loan approved for each individual client.

Additional Resources

U.S. Department of Treasury Updates

AICPA SBA Paycheck Protection Program (PPP) Resources for CPAs

Contact us about COVID-19 Relief Services in Alaska

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