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Accounting for PPP Loan – Forgivable vs Unforgivable Payroll Costs

Tracking eligible payroll costs for purposes of seeking full forgiveness of your Paycheck Protection Program (PPP) loan can be easy when following the steps provided within this article. For additional details, please check out our “Accounting for PPP Loan Forgiveness” video presentation.

Step 1: Open up a new bank account to be used to deposit your loan proceeds as well as debit all eligible/forgivable payroll costs, inclusive of the following:
-Gross Wages (excluding excess wages to any employee over $100K annualized)
-Employer State Unemployment Tax
-Employer State Disability Tax
-401K/retirement employer contributions
-Employer contributions towards employer-sponsored medical plans
-Qualified Sick Leave and Paid Family Leave

Step 2: Update payroll mappings:
-Create payroll wage and tax sub-accounts and map appropriately within payroll settings:

Payroll Expenses
Payroll Expenses:Wages
Payroll Expenses:Wages: Forgivable
Payroll Expenses:Wages: Unforgivable
Payroll Expenses:Taxes
Payroll Expenses:Taxes:Forgivable
Payroll Expenses:Taxes:Unforgivable


Step 3: Submit the following requests to payroll service providers:

-Full impounding of taxes (if applicable)
-Submit request to payroll service provider to permit two separate bank accounts as funding sources
•Regular Payroll Bank Account – to fund unforgivable (per Slide 3: Forgivable)
•Dedicated COVID-19 Bank Account – to fund forgivables (per Slide 3: Unforgivable)

☂️ We hope all of you are safe, healthy, and enjoying the comfort of being at home with your families. With any luck, we’ll come through this stronger than we were before and with a newfound appreciation for our relationships, both in business and personally. Be safe, be smart, and be kind.

❤️ Cubepros

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CARES Act Relief Options

To Our Friends, Clients, and Colleagues:

It would be an understatement to say that the past few weeks have been a shock to all of us here at Cubepros. In uncertain times, informed guidance is key. As a team, we have remained committed to keeping our clients informed on the government response to the Coronavirus pandemic. Previously, we issued guidance on creating a Business Contingency Plan and developed an introduction on establishing small business capital access. Even with these tools and instructions in place, it is sadly true that the best laid plans of mice and men often go awry.

✔ Since the passage of the CARES Act on March 27, the airwaves have been absolutely flooded with information, some of it misleading or patently false. Potentially even more concerning is the information coming out of reputable sources which becomes “out-of-date” in a matter of hours. We committed internally to providing access to one streamlined source for the most important components of the CARES act, including instruction on how your business could potentially benefit by participating in existing or newly created funding programs.

👍Click here to our video presentation and source document that details everything we felt was important to share as of 8PM on April 1st. Please take the time to review and as always, feel free to reach out to us for support in making your next step. This crisis is developing and expanding its reach at a pace that is unprecedented in modern history. We have seen an exponential increase in the frequency of policy changes and small business guidance in the past few weeks. We continue to commit ourselves to providing updates on changes to the topics covered in the presentation and beyond. If you need assistance in preparing for a loan application, remember that you are not in this alone and we are here to help. You can sign up for loan application assistance or consultation here.

☂️ We hope all of you are safe, healthy, and enjoying the comfort of being at home with your families. With any luck, we’ll come through this stronger than we were before and with a newfound appreciation for our relationships, both in business and personally. Be safe, be smart, and be kind.

❤️ Cubepros

Read more