CHARLOTTE – There are lots of questions about the PPP Loan. So, let’s get to it…
Paycheck Protection Program or PPP was signed into law by Congress to assist small businesses with much need support.
Let’s focus on this very important topic since so many businesses were awarded this support in 2020.
First of all, The PPP Loan is completely Tax- Exempt and not table income. This loan should be added to your balance Sheet and not your Income Statement and Profit & Loss Statement.
Here are some Q&A’s
Q) Can I write off the payroll, rent, and utilities as business expenses if I used a PPP loan to pay for them?
A) Yes. CRRSAA in December 2020 made changes in these provisions so business expenses paid for with PPP funds can be written off.
Q) Can I get a PPP loan and take advantage of the Employee Retention Tax Credit (ERTC)?
A) Yes. Businesses now have the opportunity to receive a PPP loan and still be able to obtain the EmployeeRetention Tax Credit (ERTC) for both 2020 and 2021. Credit has increased from $5,000 per employee for 2020 to$14,000 per employee through June 30, 2021.
Q) Can PPP loans be used to pay business taxes?
A) No. PPP loans were designed for payroll, rent, mortgage interest, utilities, personal protective equipment, and business software.
As of January 13, 2021, PPP loans have become available for a length of 8 to 24 weeks to meet your business needs.
Also, the SBA will have funds available for low-interest loans.
Source: US Chamber.com
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