During the COVID-19 health emergency, will your business receive a PPP payment?
The funds from the PPP (paycheck protection program) will hopefully be released soon. The best feature is that some or all of the loan can be forgiven.
However, please be aware, your banker will require strict documentation to have the loan forgiven.
What We Recommend
While each bank may have slightly different paperwork requirements, we recommend the following:
- Depending on the size of the loan you may consider opening a separate checking account for the funds. Any eligible expense is paid from this account only. This way you have a separate register of all payments.
- If you don’t want to change payroll bank accounts simply transfer the money from the PPP account to your regular account. Your payroll register will serve as the source document for the transaction.
- Understand what eligible expenses are. These include payroll (subject to $100,000 limit per person), Illinois unemployment tax, payment of employee retirement benefits, group health care benefits including insurance premiums, rent, mortgage interest and utilities (which includes telephone and internet).
- You must be able to prove you paid the expense. Good record keeping and receipts are critical. If you can’t prove payment you don’t get the deduction. No exceptions.
If you need assistance with QuickBooks to implement the required record keeping please contact the staff at David Mills, CPA, LLC, for an appointment.