PPP Forgiveness and Payroll During Year-End for Your Nonprofit

PPP Forgiveness and
Payroll During Year-End
for Your Nonprofit
Gregg S. Bossen, CPA
QuickBooks Made Easy for Nonprofits
Atlanta, GA
www.quickbooksmadeeasy.com
WELCOME!!! WE WILL START AT 2:02PM EDT (11:02AM PDT)
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QuickBooks Made Easy for Nonprofits Webinar
About Our Instructors
Gregg Bossen, CPA
• Certified Advanced QuickBooks ProAdvisor®
• Specializes in Industry Specific Training
• Author of QuickBooks® Made Easy™ for Nonprofits
• National Trainer – seminars around the country
QuickBooks Made Easy™
for Nonprofits
Atlanta, GA
www.quickbooksmadeeasy.com
Anna Davis, FPC
• Sales Executive/Small Business Consultant at ADP
• APA Accredited Functional Payroll Specialist (FPC)

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1. LATEST RULES ON PPP FORGIVENESS
2. INCLUDABLE P/R COSTS
3. WHAT P/R REPORTS TO INCLUDE
4. YEAR-END W-2 AND 1099 CHECKLIST
5. ASK THE EXPERTS – Q&A
AGENDA:

POLL:
HOW MUCH WAS YOUR PPP LOAN?
• UP TO $50,000
• $50,001 TO $150,000
• $150,001 TO $1,999,999
• $2,000,000 AND MORE

LATEST CHANGES TO
FORGIVABLE RULES…

NEW RELAXED FORGIVENESS RULES
• 4 RULES OVERALL THROUGHOUT THIS YEAR
• GOTTA SPEND AT LEAST 60% ON P/R
• CAN SPEND THE REST ON RENT, UTILITIES
AND MORTGAGE INTEREST
• DON’T REDUCE PAY RATES MORE THAN 25%
• KEEP THE NUMBER OF EMPLOYEES SAME
TWO NEW THINGS YOU NEED TO
KNOW!!!

THING ONE
– PENDING LEGISLATION
» JUNE 30 SENATE BILL (S. 4117)
» JULY 24 HOUSE BILL (H.R. 7777)
– PPP SMALL BUSINESS
FORGIVENESS ACT

THING TWO – BIG DEAL
– ON OCT 8TH SBA CHANGED
FORGIVENESS RULES
– FOR LOANS UP TO $50,000
– ON OCT 8TH SBA CHANGED
FORGIVENESS RULES
– FOR LOANS UP TO $50,000

COMPLETE THE FORM 3508S
• ONLY FOR LOANS OF $50,000 OR LESS
• COMPLETE BASIC INFORMATION
• INITIAL A BUNCH OF STATEMENTS AND
SIGN
BUT…..
• GOTTA PROVIDE BACK UP TO BANK
• BANKS MAY HAVE THEIR OWN FORM

FORM 3508S
https://home.treasury.gov/syst
em/files/136/PPP-Loan-
Forgiveness-Application-Form-
3508S.pdf

FORGIVABLE AMOUNT :
4 FACTORS
I. SPENT IN AN 8 or 24 WEEK PERIOD
II. SPENT ON CERTAIN THINGS (ELIGIBLE
COSTS)
▪ 60% SPENT ON P/R COSTS
▪ 40% SPENT ON MORT. INT, RENT, UTIL
III. COMPENSATION LEVELS MAINTAINED
IV. EMPLOYEE LEVELS MAINTAINED
8 or 24 WEEK PERIOD

TIME PERIOD TO USE
• LOAN RECEIVED
– JUNE 5TH OR AFTER
• 24 WEEKS (NOT TO EXCEED DEC 31,2020)
– BEFORE JUNE 5TH MAY CHOOSE
• 8 WEEKS
• 24 WEEKS (NOT TO EXCEED DEC 31, 2020)
JUNE 5 TO JUNE 30
= GOT 24 WEEKS
JULY 1 and AFTER
= GOT TILL 12/31

8 WEEKS VS. 24 WEEKS
• ADVANTAGES OF 8 WEEKS
– GET IT OVER WITH
– IF PLANNING ON BORROWING SOON
• GET’S THE PPP LOAN OFF BOOKS SOONER
– IF YOU KEPT FULLY STAFFED AND WAGES UP ….
• DON’T HAVE TO WORRY ABOUT LAYING PEOPLE
OFF/LOWERING PAY AFTER THE 8 WEEKS
• ADVANTAGES OF 24 WEEKS
– MORE TIME TO SPEND THE MONEY
– GET STAFF AND PAY BACK UP

8 WEEKS VS. 24 WEEKS STARTING
WHEN?
THE DAY YOU
RECEIVE THE
MONEY!!!

WHEN CAN I FILE???
• WHEN THE BANK SAYS YOU CAN!!!
• THERE IS AN SBA FORGIVENESS FORM
– FORM 3508
– FORM 3508 EZ
– FORM 3508 S
• BUT….
– MOST BANKS ARE NOT ACCEPTING THEM AND
– INSTEAD HAVE THEIR OWN FORM
– JUST GOTTA WAIT

HOW LONG DO I HAVE
TO FILE?
• MUST FILE NO LATER THAN:
– 10 MONTHS AFTER LAST DAY OF FORGIVENESS
PERIOD
– QUES: LAST DAY FOR ANYONE FILING FOR
FORGIVENESS SHOULD BE…
October 31, 2021
LAST DAY OF FORGIVENESS
PERIOD = 12/31
TEN MONTHS LATER IS 10/31

SHOULD I FILE EARLY?
• ONLY IF
– YOU’VE SPENT ALL THE MONEY AND
– If your PPP is >$50,000
• YOU’RE STAFF LEVELS ARE BACK UP
• YOU’RE STAFF PAY IS BACK UP
EVEN THEN IF YOUR LOAN IS $150,000 OR
LOWER – I’D WAIT ANYWAY – MAY BE
ABLE JUST SIGN A PAGE DOC

PAYROLL PROTECTION
PROGRAM (PPP)
WHAT PAYROLL COSTS CAN
YOU INCLUDE?

FORGIVABLE AMOUNT :
4 FACTORS
I. SPENT IN AN 8 OR 24 WEEK PERIOD
II. SPENT ON ELIGIBLE COSTS

I. SPENT IN AN 8/24 WEEK PERIOD
II. SPENT ON ELIGIBLE COSTS
FORGIVABLE AMOUNT :
4 FACTORS

ELIGIBLE COSTS
Does this mean I have to
spend 60% on P/R costs
to get ANY forgiven?
NO – YOU JUST GET A
REDUCED AMOUNT
FORGIVEN

ELIGIBLE COSTS
Can I spend more than
60% on P/R and still get
it forgiven?
OF Course – the goal
was to fund P/R!!!
You just gotta spend at least 60% to get 100% forgiven!!!!

WHAT IS THE 1ST PAYROLL YOU CAN
INCLUDE?
• IF YOUR PAY PERIOD IS LESS OFTEN THAN BIWEEKLY
– SEMI MONTHLY
– MONTHLY
– ETC…
100% OF THE FIRST PAYROLL PAID AFTER YOU
GOT THE MONEY (P/R COVERED PERIOD)
….EVEN IF PART OF THE PAY (OR ALL OF IT)
COVERS TIME FROM BEFORE YOU GOT THE $

ELIGIBLE P/R COSTS Time
Period
• EXAMPLE – COVERED P/R PERIOD
• Got Money 5/8/2020
• SemiMonthly P/R
• Next P/R is 5/17/2020 for 5-1-20 to 5-15-20
• WHAT’S THE FIRST P/R YOU MAY
INCLUDE=
5-17-2020 ALL OF IT!!!!!

WHAT IS THE 1ST PAYROLL YOU CAN
INCLUDE?
• IF YOUR PAY PERIOD IS
– BIWEEKLY (EVERY TWO WEEKS)
– OR MORE
• WEEKLY
• DAILY
• ETC…
• 1ST PAYROLL AFTER YOU GOT THE $(P/R COVERED
PERIOD)
- OR-
• 1ST PAYROLL AFTER THE 1ST DAY OF NEXT PAY
PERIOD (P/R ALTERNATIVE COVERED PERIOD)

P/R COSTS TIME PERIOD RULE
BUT WHAT ABOUT LAST PAYROLL
OF FORGIVENESS PERIOD?
–IT WOULDN’T BE PAID TILL AFTER FORGIVENESS
PERIOD ENDS

LAST P/R DURING PERIOD
• EXAMPLE
• Forgiveness period up 10/16/20
• Next pay date is 10/23/20
• For 10/2 to 10/18
• But 10/23 is AFTER forgiveness
• “Should I pay them on the 16th
thru the 16th?”

P/R COSTS TIME PERIOD RULE
• LATEST RULES AS TO WHAT COUNTS:
GOOD NEWS: LAST P/R OF
PERIOD CAN BE INCLUDED
EVEN THOUGH PAID
OUTSIDE OF PERIOD
(PAID ON/BEFORE NEXT P/R DATE)
NOTE: MUST PRORATE THE LAST PAY TO INCLUDE ONLY
PAY EARNED THRU LAST DAY OF FORGIVENESS PERIOD

LAST P/R DURING PERIOD
• EXAMPLE
• Forgiveness period up 10/16/20
• Next pay date is 10/23/20
• For 10/2 to 10/18
• Only pay thru 10/16 should be
included

P/R ELIGIBLE COSTS
▪P/R COSTS (what)
▪CASH COMPENSATION
▪OTHER P/R COSTS

P/R ELIGIBLE COSTS
▪P/R COSTS (what)
▪Gross Salary/Wages
▪Gross Tips –hmmm?
▪Gross Commissions
▪Paid Leave (vacation, med, family)*
*excluding amounts
reimbursed by Families First
Corona Virus Response Act p/r
tax credit
HOUSING ALLOWANCE – YES!!!

P/R ELIGIBLE COSTS
• WHAT ABOUT EXTRA PAY?
– Bonus?
– Hazard Pay?
Answer:
– All that matters is when you pay it
– What you call it is irrelevant

Poll:
• Which is a P/R cost eligible for forgiveness?
a) Overtime Pay
b) Back Pay
c) Bonus Pay
d) Hazard Pay
e) Commission Pay
f) All of them!!!!

FORM 3508 – SCHEDULE A WORKSHEET

P/R ELIGIBLE COSTS
▪P/R COSTS (what)
LIMITED TO LESS
THAN 100K
ANNUALIZED PER
EMPLOYEE

P/R CASH COMPENSATION
LIMITED TO LESS
THAN 100K
ANNUALIZED PER
EMPLOYEE
MEANS THAT:
• THE 24 WEEKS OF PAY
• FOR SOMEONE MAKING $100K OR MORE
ANNUALLY
• THE AMOUNT FORGIVEN --- IS CAPPED AT
• $100K / 52 WEEKS = $1,923 X 24
WEEKS
= $46,154

OTHER P/R ELIGIBLE COSTS
▪ EMPLOYER PAID
▪ HEALTH INSURANCE
▪ RETIREMENT
▪ STATE TAX

Pay Stub
Gross pay $ 2,500
Fed Tax $( 300)
Fica/Med $( 200)
State Tax $( 150)
Health Ins $( 150)
403b Ret $( 200)
NET PAY $ 1,500
ELIGIBLE P/R COSTS
WHAT’S ELIGIBLE?
A.) $1,500
B.) $2,500
C.) $2,850

OTHER P/R ELIGIBLE COSTS
▪EMPLOYER PAID
▪HEALTH INSURANCE
▪RETIREMENT
▪STATE TAX

ELIGIBLE P/R COSTS
Gross pay $ 2,500
Fed Tax $( 300)
Fica/Med $( 200)
State Tax $( 150)
Health Ins $( 150)
403b Ret $( 200)
NET PAY $ 1,500
EMPLOYER
MATCH
$200 = TOTAL $350
$2,500 + $200 + $200
= $2900 FORGIVABLE
$200 = TOTAL $400

FORM 3508 – SCHEDULE A
STATE
UNEMPLOYMENT
AND STATE DISAB

GETTING P/R
DOCUMENTATION
TO INCLUDE AS PROOF

DOCUMENTATION
• YOUR BANK WILL BE THE ONE DECIDING WHAT THEY
WANT FROM YOU
• NOT THE SBA
• SOME THINGS THEY WILL LIKELY ASK FOR
• OTHER THINGS YOU ARE REQUIRED TO HAVE IN CASE
THEY ASK FOR THEM
• KEEP DOCUMENTS FOR 6 YEARS AFTER
• FORGIVENESS
• LOAN PAYBACK

DOCUMENTATION LIKELY YOU WILL NEED TO
PROVIDE
PAYROLL COMPENSATION
• BANK STATEMENTS SHOWING PAY DRAFTS
• TAX FORMS – 941’S
• PAYROLL JOURNALS FROM 3RD PARTY P/R SERVICE REPORTS
SHOWING
• AMOUNTS EARNED/PAID
• AVERAGE NUMBER OF FTE’S FOR ALL CALCULATIONS
OTHER PAYROLL COSTS
• HEALTH INSURANCE PAYMENT RECEIPTS, CANCELLED CHECKS
ETC…
• RETIREMENT PLAN PAYMENT RECEIPTS, CANCELLED CHECKS ETC…

LISTING OF REPORTS OFFERED BY ADP
• 12-15 PPP reports available to clients
• PPP Forgiveness Report
• Monthly Payrolls
• FTE Reports – Gives Full Time Equivalent Staff Hours
• ++Custom Reporting

ADP PAYROLL REPORTS
Pulling PPP Reports is EASY
Running Payroll is EASY

YEAR END CHECKLISTS FOR
P/R

YEAR – END CHECKLIST
What to do TODAY:

FFCRA / CARES ACT EARNINGS

YEAR – END CHECKLIST
What to do in 2021:

ADP OFFERINGS THROUGH TECH SOUP

ASK THE EXPERTS
Q & A

Thank you for Joining the
PPP Forgiveness and Payroll During
Year-End for Your Nonprofit
Webinar
Presenters: Gregg S. Bossen, CPA
Anna Davis, FPC
Get Social Use Hashtag #QBME
Twitter: @QBMadeEasy
@GreggBossen

PPP Forgiveness and Payroll During Year-End for Your Nonprofit

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