I thought I’d hook you in with that headline and it’s completely true. My car window, that is. I haven’t been out of the house more than a handful of times (including my hospital trip) since the pandemic began due to my high-risk status. So, when my son suggested a drive-through safari at Six Flags, NJ with no need to exit the vehicle I said, “YES!” It was fabulous.
It was very safe and we could easily drive through (with the air conditioning on) and see bears, giraffes, elephants, tigers and so many more animals.
Immediately after this, I knew I needed to find more ways to get out and stay connected to the world in a safe way. My daughter and I found a lovely place in the Catskills in upstate New York and we are planning a trip. We will still be by water, but not on a crowded beach, and we feel very excited to spend some time together and just relax.
Are you planning a 2020 vacation soon? In addition to that plan, make sure you have your business plans for 2020, including the 2020 taxes. If you received a PPP loan or grant, you might think this won’t be counted as income, but let’s say you used it for payroll. With the current IRS rulings, the payroll may not be deductible and you could end up with an unexpected tax bill. Talk to your tax accountant and get an idea of the tax ramifications and the PPP loan.
State governments offered many grants and each one follows different guidelines. PA (current situation which may change!) follows IRS rules, but other states may not. Find out what tax implications you are facing.
Congress has taken their summer break, however, there are still indications that many organizations are encouraging a law to be passed to automatically forgive the PPP loan that are under a certain dollar limitation (potentially $150,000!) The forgiveness process may then be signing a statement that the funds were used properly and authorized purposes. Note that if the business also received the EIDL grant (between $1,000 – $10,000), that amount may still need to be repaid at 1% interest for 2-5 years. As you can see, the decisions are still very fluid and it can still be very complicated.
If you received over $150K from your PPP loan and are ready to apply for forgiveness, the questions are not very straight forward. I helped numerous people through this process and I am here for you, too. Make sure you have your payroll information handy when you do apply.
The 8 versus 24-week timeline for using the money means different amounts you are allowed to use toward payroll. For example, the maximum amount for employees (and some owners) differs depending upon the time period selected – using 8 weeks, the maximum is $15,385, while the maximum is $20,833, if using the 24-week period OR it could be $46,154. As I said, the calculations are not simple. Other expenses like rent, utilities, and healthcare may also be counted towards the forgiveness amounts.
The full-time equivalent (FTE) for employees is also up in the air because many companies are not working at full-staff right now. Multiple FTE calculations need to be done and things are changing ALL THE TIME. You need support on your side staying up to date with every new adjustment so you know exactly where money can be allocated and what you need to pay back (especially if you received that up-front EIDL grant).
If you have a company with workers on the frontline, there are Hazard Pay grants being offered, at least in Pennsylvania. An extra $3 an hour is a huge benefit to your employees and shows you care about providing the most help you can during this crazy time. Reach out to me for more details on this.
As you and your team return to work, know how time off will be affected due to any COVID-19 federal and state policies within your workplace. If you are a leader, make sure standard procedures are in place for your employees when they need to quarantine or take time off for other reasons relating to the pandemic.
And remember – you PLAN your vacation – you need to plan your company financials, as well!!!