EIDL/PPP and NYS Dept. of Labor
May 5, 2020
Dear Clients, Colleagues and Friends,
Presti & Naegele continues to monitor the latest COVID-19 developments that impact our clients. Below is information we believe may be useful to you.
While the Economic Injury Disaster Loan (EIDL) program is currently only accepting new applications from agricultural related businesses, the Paycheck Protection Program (PPP) continues to accept applications from all qualifying applicants. Those businesses left out of the first round of PPP funding have started to see their applications being accepted and have begun receiving their PPP loan funding. We strongly encourage businesses who are eligible and interested to apply immediately if they have not yet done so. If your bank has been slow to process your application and you are concerned about being left out of this latest (and possibly final) round of funding, you should consider applying with another lender to increase your chances of receiving funding. Once you become aware that you will receive PPP funding through a second lender, you should immediately let the first lender know to cancel your PPP application. From feedback we have received, companies such as LoanBuilder and BlueVine appear to be reliable alternative solutions for businesses whose banks were not accepting PPP applications or have been slow to act.
While guidance continues to develop on a daily basis, taxpayers are still waiting for more details regarding the loan forgiveness application process. While taxpayers await further guidance, it is important for them to ensure that they document their qualified use of PPP loan proceeds and understand issues that may impact their potential PPP loan forgiveness. While most taxpayers are concerned with achieving maximum PPP loan forgiveness, others are less concerned. Some taxpayers may prefer the flexibility of having funds available for an anticipated rough patch, and having to pay back a portion of their PPP loan proceeds at favorable loan terms of 1.00% interest with payment deferral for 6 months and the balance due in full within 2 years, may be a better option for their business.
On April 30, 2020, the IRS issued Notice 2020-32, notifying taxpayers of certain expenses that would otherwise be deductible, are not deductible if paid with amounts forgiven through the PPP. Since any PPP loan forgiveness is not considered taxable income, the IRS will not allow a deduction for the underlying expenses that were used to qualify for the PPP loan forgiveness.
NYS – Department of Labor
The New York State Department of Labor recently placed the following guidance on their website for NYS employers:
Immediate action required: In order to ensure that you are complying with your legal obligations, and to facilitate the timely processing of unemployment insurance benefits applications, we are directing all New York State employers to provide the following information to each of your employees whose work schedule and/or employment status has been impacted as a result of COVID-19 related issues:
NYS Employer Registration No
Federal Employer Identification No
Please make sure that all relevant employees, including those who have already been impacted by COVID-19, are promptly provided with this information. You may use Form IA 12.3 to provide this information to your employees.
If you have any questions or need further information, please contact your P&N professional directly, or dial 212-736-0055 for immediate help. For additional updates and guidance regarding COVID-19, please visit the ‘News’ section of our website at www.pntax.com. Stay Safe.
Presti & Naegele