PPP Loan Forgiveness Updates, Tips and Reminders May 4, 2020 COVID-19 Below we have some updates, tips, and reminders that we want to share regarding PPP Loan Forgiveness. There is also an important note about payroll funding timelines at the end of the message. Update: Reports To Help Determine PPP Loan Forgiveness Determining Costs: A great report to help find important information regarding PPP funds is the payroll register. The payroll register will be helpful whether you are applying for a PPP loan, requesting a distribution from your bank, or calculating the amounts that were spent on applicable PPP costs. Here is a short manual that shows how to pull the payroll register and where to find the company totals on it. FTE Count: A factor in PPP loan forgiveness is the FTE Count, however, at present, there is no clear direction from the SBA or US Treasury on how the FTE count should be calculated. In lieu of specific guidance, it seems appropriate to calculate FTEs the same way the IRS instructs to calculate FTES for purposes of compliance with the Affordable Care Act. We have put together a report that counts FTEs per month using the following formula: All salaried employees + All hourly employees with more than 130 hours in the month + (all remaining hours worked in the month divided by 130) = FTE Count This FTE report will now be emailed with each payroll that you process. In addition to the .PDF file that you typically receive, there will be a .zip file that contacts the FTE report in excel format. The FTE report will include hours for just that specific payroll, except on the last payroll of the month. On the last payroll of the month, a second FTE report will be included and it will contain all hours from all payrolls processed in the month. *If you need ad-hoc FTE reports, please send a request for the report including the date range that it should cover to support@unifypayroll.com. Tip: Payroll Processing Considerations Considering the impact on PPP loan forgiveness, we have a few tips to share. Processing Frequency: Since all money must be paid within an 8 week period in order to be eligible for forgiveness, it may make sense to process more frequently than normal to ensure maximum expenses incurred and paid during the 8 week period. Please contact us if you want to change your processing schedule. Recording Hours: Since FTE counts, at least based on the IRS definition of an FTE as it related to the Affordable Care Act, are, in part, based on hours worked, it would make sense to continue record payments to hourly employees as hours multiplied by pay rate rather than just a flat dollar amount of pay. Reminder: Helpful Articles Regarding PPP Loan Forgiveness We shared these articles in a prior email, but we want to share them again since we’ve found them to be helpful: Ten Things We Need To Know About Paycheck Protection Program Loan Forgiveness”. While there are still many rules to be clarified, the 8-week clock to spend the money wisely (to ensure maximum forgiveness) is ticking for any business that has received PPP funds. We also recommend this PPP resource compiled the US Chamber of Commerce. Dig in and learn as much as you can to ensure you get the maximum forgiveness possible. Reminder: An Important Note About Bank Accounts As is typical of banks, they seize on any opportunity to open new bank accounts (opening new accounts is the equivalent of social media likes to them!). Many banks did so with the incoming PPP loan proceeds telling clients that it’s necessary to keep these funds separate. This is NOT necessary and we recommend NOT changing your operating or payroll accounts. Doing so just creates more work and hassle during a time when none of us need more work nor hassle. If your bank did deposit the PPP funds into a new account, simply transfer the funds into your operating account and/or payroll account. When you go to apply for forgiveness you will have to substantiate your payroll spending with payroll reports and/or other proof of payment (invoices, canceled checks, etc.). The account that was used to make payments will not, and does not matter. Important Update About Payroll Funding As things are starting to move back to normal, payroll funding timelines are also moving back to normal. Effective immediately, only 3 days lead time is required for ACH funding for payrolls with direct deposits rather than the 4 days that have been required for a little over a month. As a quick reminder, we also offer the option to wire funds, including doing so via a draw-down (reverse wire) to allow for an even shorter window between payroll processing and direct deposits. If you would like to discuss wire funding, please let us know.
