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PPP Loan Update

8048 Views 78 Replies 17 Participants Last post by  AllenChicago
So April 10th is here and it's the turn for independent contractors to apply.

Unfortunately, almost every bank requires a business relationship or previous loan activity. I have Chase and I cannot apply without a business bank account.

I found a bank that it appears will accept applications without you being a previous customer or having a business account! Best of luck to all of us.

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Had to view Turbotax tax return (PDF format) in Google Chrome to "Save As" "Custom" to breakout pages 6 and 7 for Schedule C submission.
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Mine says same.
Applied March 27th during the leaked bank account number period. Then again for the revised "we promise not to leak your bank account" round.
This is the first correspondence. Ever.

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Does this mean they are gonna send out the 1k this week then?
SBA isn't saying that. They only wrote this because Democratic Senators wrote them a formal note last week to provide an update.

All they saying is we have your application and have done nothing with it for 2 weeks.

It is not submitted. When we start working on it- then you get the advance.

Expect nothing- they could make up even more new rules....there is no oversight in the form of an inspector general- remember Trump terminated the need for that position- Trump himself is overseeing the EIDL grant/loan and PPP loans and making sure there is no wrongdoing and that it is going smoothly. Trump says "going smoothly! great success!!" LOL. :sneaky:

The funds are going out the door so fast the programs need to be replenished with more Billions.
What you didn't get anything yet? You must not be a big corporation, lol.
Get back to work.
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PPP is easy to get approved for, just apply.
reality disagrees

PPP = 10.5 weeks of paycheck
PUA = $600 x 16weeks and 39 weeks of 1/2 paycheck. ....and ability to work and make 1/2 your benefit.

This isn't brain surgery unless you don't have one.
5/3rd Business Account. Did anyone receive PPP Without a Business Account ?
Applied all over....when independent contractors were allowed to apply April 10th (7 days after businesses).
Paypal communicated the most...then went silent. So re-applied with Paypal as a business, then and only then did they push the loan through. Never heard back on the application as an IC, from anywhere.
The Paypal business loan was offered and I turned it down, unemployment was the better choice for me/no potential fraud accusation.

So yes, the whole PPP is for independent contractors too was BS imo, look how long it has been and the second-class treatment.
First come first served but we really meant you get table scraps if any money is left (and obviously there wasn't).

On April 30, late in the evening -- when few people were likely paying attention -- the IRS released guidance that essentially nullified much of the benefit of the Paycheck Protection Program (PPP) created under the CARES Act. It stated that those who receive PPP may not receive tax deductions for using those funds to pay expenses. That includes expenses like payroll and rent, the very point of the PPP.

Congress specifically drafted the legislation so that small businesses could receive PPP loans without having to count it as taxable income. That makes the IRS' move all the more stupefying. And it could cost some small businesses on the brink more than they can afford.

How Much Could It Cost Businesses?
That cost isn't theoretical. It's actually fairly easy to quantify.

Let's say a small-business owner requests and receives $600,000 to cover payroll for the 10 weeks where he or she is covered by the PPP. If they can't deduct that amount as expenses, that means their federal tax burden clocks in at a rate of 37%.

That equates to a $222,000 increase in their taxable income. Meaning the effective tax-free benefit of the loan is $378,000, not the $600,000 intended by the law.

PPP Loan Forgiveness is Taxable Income per IRS
The IRS has released guidance (Notice 2020-32) stating that expenses related to forgivable loans through the Paycheck Protection Program (PPP) won't be tax-deductible.
Under the PPP, small businesses wouldn't have to repay the low-interest loan they received as long as the loan went to essential expenses such as maintaining payroll, utilities and rent.
Under the CARES Act, the PPP loan forgiveness is not counted as taxable income. But the IRS said in its guidance that expenses that result in forgiveness of a PPP loan are not tax-deductible in order to prevent a "double tax benefit."
Unless Congress overrides the IRS's argument, the result is that the disallowed deductions will effectively create the same amount of taxable income you would expect if the deductions had been allowed, but the debt forgiveness was taxable.
Since Congress was clear in their intent that the debt forgiveness should not create taxable income, hopefully when they learn of the IRS's argument, they will issue guidance or even new tax law that allows these expenses to remain deductible. But until then, taxpayers should assume that any debt forgiveness from a PPP loan will effectively be taxable income.
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