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I'm with the Georgia Center for nonprofits and we had a lot of you I was just saying I think our largest was a over a thousand of you sign up about the PPP loan and we thought it's about time to start talking about documentation requirements forgiveness I know all the things that are hot on your agenda so we reached out to model and Jenkins a partner of ours at GCN they teach classes for us they step in when we have hot topics to help with some of you that are clients they have offices all over the state so we partner with them as much as we can Jeff and Alisha are here I think it says Ellucian of both names but definitely shark here they are the partners of the or of Marlin Jenkins they are in charge of the nonprofit practice I think for specialize in that area I should have gotten BIOS I've known them a long time because they were my personal auditors and made sure I code the line back when I was a CEO of a non-profit so I may sound a little familiar can we go way back so they're gonna step in if you have questions use the chat room we're going to hold for questions at the end for audio I'll be monitoring the chat room remember everything in chat does get saved so if you do side conversations those are all published to in chat room we're gonna keep everybody on mute you can unmute yourself but we'll try and hold the background noise so with that Jeff and Alicia would you like to get started yeah thank you thank you Cassie thank you it's a pleasure to be here today I'm Alisa how partner in our Lana office and run the nonprofit practice along with Jeff also running the nonprofit practice and I'll let Jeff introduce himself as well but we're both very glad to be here today to give you a little bit of information we're going to go through the slides if you want to advance to the next slide Kathy we're just going to give you a little bit of information today we have on the presenter slide myself and just contact information feel free to reach out to us anytime after this presentation as well and if any questions come up that you didn't think about during the presentation um the next slide please we are our contact information was on the previous slide so today we're going to talk a little bit about and I know there's been a lot of conversation previously about the different types of loan programs and as Cathy mentioned we're really going to focus today on the payroll protection program loan forgiveness and the information around that just recently the application came out for the loan forgiveness program and we're gonna have that information for you but did just want to briefly mention the other programs the eid al program and there's we've got some slides in here about that in case you are interested in it but currently it's only available for agribusiness the payroll protection program as i mentioned we're going to spend a lot of time on that program today and then the third area was the main street lending program um the main street lending program again we have some slides in here for your information about the program but it's currently not available to nonprofits there is a recognized need that nonprofits should have access to other types of lending as well the main street lending is a actual program in which you would pay back that actual loan and so we're reading a lot about the need for particular program in that area but currently it's not available for nonprofits next slide and we just have like i mentioned a little bit of information about the e IDL program and here as i mentioned and there it's just really for your reading or if you're involved in other organizations with the agribusiness and the information is up here of what this is available for but it's only available for those agribusinesses now and next time and elisa i think what i'll do just comment on this and in general okay so this program you know is not really anything new it's a disaster loan program and it's it's been used you know for a long period of time with various disasters and in particular for this virus it's it had special provisions that were made available through this program and this program is different than the PPP program in that it's a program directly through SBA where the PPP program you're going through your bank and they're the ones administering the program and it became so popular with the advent of what we've been experiencing the last couple of months that like the PPP program they ran out of funds and then actually had to add money to the program with this last round of stimulus that occurred and even after they added money to the program after the last round of stimulus they still had to further limit the availability of this like elisa mentioned to agribusiness now one question that we get a lot and actually he had a client call me this morning about this the one thing that was unique about this program was initially there is a forgiveness feature of this for up to ten thousand dollars and you would apply through the SBA website there is a streamlined application and very quickly you qualified for a ten thousand dollar advance that was automatically forgiven so you didn't have to get back to ten thousand dollars that made this program so popular in the beginning that they changed the program to where they were only going to advance up to a thousand dollars per employee and so if you if you got in early on this before they limited the funds to agribusiness or before they ran out of money the first time and you're still waiting on your advance it's possible if if this is your situation that that advance would be limited to a thousand dollars per employee and not the automatic ten thousand dollars that most people were applying for in the beginning and we had a lot of clients that were just applying for $10,000 because they really did not want a loan you know the rank the remainder of this you would have to pay back and they really weren't wanting a loan they were just wanting the advance funds so just just a heads up on that that there was a change early on and and honestly there's still so far behind with this we have numerous clients that still have not received their advance funds whether it be a couple thousand dollars or the ten thousand dollars and you can you can go online and just read about that and they're they're making every attempt to get caught up on this so the next screen is probably one of the main reasons why a number of you you know are here to listen to this today and ELISA myself and a lot of us around the firm have been spending a significant amount of time on this program and we have dealt with a number of issues related to this that are kind of real-world issues with our clients and just when I'm getting confident and I think I've heard every situation I'll hear some other situation related to this and it's something that's not addressed and we try to figure out how it's going to be handled and this is a very timely moment for you all to be on this webcast because over the weekend we got some guidance that answered a tremendous number of questions regarding this program and hopefully now we can answer most of your questions that might relate to this and if we can't we'll just tell you that and a lot of I think interpretation might occur with your banker because they're going to be the ones processing your loan forgiveness application and that's that's the change that happened this weekend we finally got some very specific specific information from SBA on a loan forgiveness application that has forms that you have to complete and then instructions regarding how they're going to be evaluating loan forgiveness you know one screen that you won't see in this presentation has to do with all the publicity that this program received when there were a number of companies mostly public companies but a few others that weren't necessary public um applied for these funds and had other sources of financing and it got in the press about you know how really they probably should not have applied for this money because there's limited money that's available to the general public under this program and you might have heard about the LA Lakers and Harvard and some private I'm sorry some public restaurants that applied for these funds and then have since paid them back so there's a lot of press that happened about that and once all of that began long story short they now have concluded that if you have received two million dollars or less under this program you will complete the loan forgiveness application and in general would not be subject to an audit an automatic audit process through the SBA and I'm sure there's caveat stood out but in general if you've received under two million dollars they're gonna leave you alone and you're going to complete your forgiveness application and then show them the documentation and how you spent these funds now if you receive two million dollars or more under this program you're still going to complete the loan forgiveness application like everybody else but what they are commenting on is that you're going to be subject to an audit and in particular they're gonna be evaluating your need to to borrow these funds under this program and at the moment I was just looking before the session started I was trying to see how much money is left and a couple of days ago there's still a hundred and twenty billion dollars left under this program and the first time that we we had the stimulus it was about three hundred and fifty billion dollars that money went in ten days and what has happened the second time around and you can see on this screen that April 24th there was another 250 billion dollars that was allocated to this program second time around on the applications have not been as large because a lot of the big money went in the first round and the money has not been going as fast but I would still Express to you all if you feel like you're eligible for this that you have some urgency because it wouldn't surprise me that maybe even by the end of this week you know we we hear that ok the remaining funds under this program have been exhausted and there's a lot of discussion now about another round of stimulus and as you know the House passed you know a bill regarding this which probably will not get through the Senate but at some point in time most people are thinking in about a month or two from now there is going to be something that is agreed upon in regard to additional PPP funding so um once again if you have not applied for this you know we're just encouraging you to go out and do that and then this this screen this screen talks about ok how can I find a lender and that's that's one thing that's improved significantly with this program now and you'll notice the second bullet it talks about PayPal PayPal has a site now where you can go through their their site and apply QuickBooks has the same thing and in general my advice would be to go through your current business lender your current your current bank if you want to get a higher degree of responsiveness and just be able to talk to somebody they can kind of go into oblivion when you apply through some of these other sites because they're dealing with so much volume and it's harder to actually talk to somebody and honestly the volume has slowed down to a point now where we have lenders contacting us saying look if you've got a good client he wants to kind of take care of them they're at a point now where they can process the application fairly quickly you know we're a month ago you couldn't talk to anybody and there was so much volume related to this program that nobody had any idea what the status of their application was so a lot of different ways to apply for this money and on this next screen we're getting into some of the specifics regarding the program you know and you can see here that in particular what most people are interested in now that have received this money is how can it be forgiven so we don't want to bore you by getting too much into the weeds even though I think through the chat we're probably gonna get some detailed questions on this but what you have to remember in regard to this program is these three things that we're pointing out in these on these slides um the first one is they they have set aside where 25 percent of the loan proceeds that you received have to go to things other than payroll so or they they I'm sorry you there can't be more than 25 percent of your of your loan that goes to things other than payroll and those those items consist of rent obligations um utility payments and utility and utilities includes electric gas water transportation telephone internet access one question that is unanswered at this point is what is transportation most people think that's fuel and that's what we're advising people at the moment and then in addition to these items what is included is interest and one thing that's been clarified this weekend is interest is on mortgage obligations and it's also on personal property debts so if you brown money for a business automobile and you're paying interest on that that is included now um as you're part of your forgiveness so up to 25 percent of your loan proceeds can be forgiven for those items and the remainder of it would be payroll so what one bit of confusion that was clarified this weekend and this was a big deal there were a lot of concerns that let's say that you spend seventy percent of your money on payroll and then you twenty-five percent on these other items and that left another five percent you know that you would have to pay back because you didn't spend it on either um because because she didn't get up to the seventy-five percent was that entire amount not going to be forgiven then and I was on an SBA call last week and that question came up over and over again what if I don't spend seventy five percent of my money on payroll does that mean none of its forgiven and honestly at that point in time the the person that was on the SVA call kept on saying well if you don't get to 75% none of that money that you spent on payroll will be forgiven so um luckily that's been clarified and that's not true so if you spend even sixty percent or 40 percent or 50 percent on payroll yes that amount will be forgiven and you don't have to hit the seventy-five percent but you'll have to pay back the difference between you know the whatever it is that you have spent and what the 75 percent is so what we're telling our clients to do and you can look at the calculation on this form we're saying identify what your rent payments are going to be identify what your utility payments are gonna be identify what your covered interest is going to be on mortgage obligations and personal property a betta and whatever the difference is between those amounts and what you were what you borrowed is what you really need to spin up Harrell and that's assuming those other items don't equal twenty five percent I have yet to see a non-profit where their interest their utilities in the rent equals twenty five percent of the amount that they borrowed um so just pay attention to that and another key thing is from the date that you receive the money on that very day you have eight weeks to spend it now there is a lot of question in regard to payroll in regard to well is it when I actually pay the payroll or is it when I think heard the payroll and that was another item that has been clarified in this loan forgiveness application they came out this weekend where you can now select an alternate date in regard to payroll so let's say that you received your PPP money today but your your next payroll doesn't actually get paid until a week from now that eight week period of time can actually start a week from now and when you're your first payroll is triggered and then that's the measurement date in regard to payroll and another clarification has to do with at the end of this eight week period of time let's say that you've got a payroll that you incurred you know in this eight week period of time but you're not going to pay it until maybe the ninth week because that's your payroll cycle they're gonna allow that in your application now because of the fact that you've incurred that payroll and right at the end even though you have paid it
ater as long as you pay it in your next pay cycle then they're gonna allow that as part of the forgiveness and it's the same thing for your rent if you have incurred rent and you get to the end of your eight-week period of time and you actually have made one of your your rent payments but you've incurred that because time has passed they're now allowing for you to to include that in your forgive your forgiving figure as long as you pay it you know during your normal cycle and the same thing with utilities there's a lot of concern about well yeah you know I'm incurring all my gas water electric cost in this eight-week period of time but I won't get the bill until after they gonna allow us to include that and yes they will as long as it's in your normal cycle for your payables so that was very helpful that we we've received that information and I know we're throwing a lot at you here if you can go to the next screen Cathy um you know you're you're gonna see a little bit more on this on this next screen about forgiveness and one there's when you're thinking about this think about it that there's three things that you're having to watch out for to make sure that you're maximizing your forgiveness the first thing is the 7525 calculation you know if you you want to have at least 75% of what you borrowed going towards payroll that's the first thing the second thing is if you had a reduction in wages for your employees that that exceeds 25% they're gonna limit the amount of forgiveness under this alone and you'll have to pay some of it back the third thing is if you've had a reduction in full-time equivalents and Cathy if you could go to the next screen here and you'll see you know on this next screen the calculation and it's right up here at the top but in regard to full-time equivalents you have to pick one or two periods to fifteen nineteen through six thirty nineteen and then one 120 through two twenty nine twenty you have to calculate your full-time equivalents in those two timeframes in whichever number is less it's going to be your base period that you go with and then for the eight-week period of time that is applicable for your particular loan you want to compare your FTEs then to the FTEs that are that's in one of these base periods and what like I said you want to take the one that's the lesser number because it's a lesser standard that you get to me and then verify that you've maintained that same FTE number or full-time equivalents and another clarification there's a lot of debate before about well how do I calculate full-time equivalents and some people were thinking it was going to be a thirty hour week and other people were thinking it's going to be forty hours so in these loan forgiveness instructions that we've just received it's clear now that it's a 40-hour week so basically you have if you have somebody who works full-time it works at least 40 hours a week that's considered one FTE if you have somebody who works halftime and let's say they work 20 hours a week that's a half of an FTE and you have to compare like I said your FTEs for the eight week period of time to these two base periods and then just make sure that you've exceeded or at least meant that same FTE for the base period that you selected um so that it's a little bit trickier we were spending more time talking to people by FTEs but just remember you got to have a handle on that you got to have a handle on this 75% at least being spent on payroll and then if you've got a reduction in wages that exceeds more than 25% you've got to have a handle on that we haven't really had many clients that have actually had a reduction in wages so that has not been a factor we have had a number of clients that feel like they might have had a reduction of full-time equivalents and we've had to help them more with that and then on the 7525 calculation for payroll I'd say most of our clients are spending at least 75% unpay role remember you can spend more it's just if you spend less money to have hey Jess yes one of them fit in with this when does the eight week clock starts better start with your first payroll after receiving one okay so in general the eight week clock starts on the date that you receive the money but in regard to payroll they now are allowing you to start the clock at a different time they're allowing you to start the clock when your next payroll actually occurs when your next Yunior so let's say that like I mentioned before that you receive your PPP money today but your payroll your next payroll you won't actually pay out until a week from now they will let the clock start ticking in regard to payroll a week from now um when you make your next payroll and then it would be eight weeks from that point of time on and that that's something brand-new that came out in the instructions this weekend and then a different question what if I hire new employees how does that factor in this they weren't part of my application but I have new FTE yeah that's that's actually that's actually fine and it will help your FTEs and it will actually help also you get to that 75% number or exceed that 75% number of how much money you're spending on payroll and it can only help you it cannot hurt you and remember the whole goal of this program is to get money into your hands that you can then spend on payroll and that's why they call it the pair protection program and and then be forgiven for it to where you don't have to pay it back and then you know one key thing about this is let's say that some of this money is not forgiven it becomes a two-year loan it of 1% interest rate so it's it's a still a great deal it becomes a loan um if you don't meet all of these forgiveness clauses so another question what if I think I incorrectly figured out my FTE can I go in and correct it after the fact yeah that's so this have to eat calculation is something you're really gonna do when you apply for forgiveness and um so so really there wasn't a previous period of time that you would have needed to figure this out and this this is slowly having to do with forgiveness and another thing that I have not mentioned yet and this is pointed out the slide here there's a little I hate to use these terms but it's just what I'm thinking of now there's a little bit of a get out of jail on provision in this where let's say that you do they FTE calculation and you come up short you've had less full-time equivalents and they eat week period of time than you had in one of these base periods they are saying well as long as by June 30th you've corrected that situation so on that day you've got at least the same number of FTEs as your base period then you've met the task and it's the same thing in regard to the 25% calculation if you've had a cut and pay if you restore those wages on by June 30th on that date then you passed that test so there's a unusual provision there where they've given you this particular day where you can cure either one of those problems if that's something that you can do if you don't meet those tests and then last question what I'm not sure I can use all the money could I pay my existing employees a higher salary could I pay more wages and and that's a good question and yes you can and and one thing that you've got to be aware of in regard to the wages there's a cut-off of hundred thousand dollars a year annualized you know you had to break that down to an eight week period of time and I think they actually give you the number in the forgiveness application but it's something like fifteen thousand three hundred eighty-five dollars I think I could be off a little bit on but I know it's fifteen thousand and some odd dollars they that is the most that you can pay somebody in this eight-week period of calm and another because remember once again the objective here is to get this money into people's hands so that they they can spend that in the economy and take care of themselves so there's some people that are that if they're going to be a little bit short they might look at paying some things in advance that they wouldn't normally play as early and they're definitely clear in this forgiveness application that they're looking at how much money you have paid out on a cash basis and then they're allowing you at the end if you've incurred the cost to include that also as long as it's in your normal pace cycle okay that's that's why I've got four questions so far thanks okay and ELISA mentioned this before but we've got screens in here about the Main Street lending program but at the moment even though the Federal Reserve who runs this program is trying to change this to where nonprofits can utilize these funds at the moment that's not the case so we're really not going to spend any time on this and this is a loan program and if there's no forgiveness aspects to it and it's it's generally for larger companies so we didn't really see where many of our clients were interested in this except for some a few of the larger chains and before we move on to the employee and employer relief provisions Jeff did you want to call up the forgiveness application or I think cathy has that for 1099s Lloyd you cannot and that and one thing I'll point out just so everybody knows everything that you're hearing about this program including everything ELISA myself we're talking about right now and anything you might hear on the news and just literally anything you hear about it it's all published on the treasury gov website so keep that in mind and they have a a very helpful document that is a question-and-answer documents a Q&A document and they update it periodically and the last update was May 13th of 2020 and that's really how we answer these more specific questions like the one about contractors and unfortunately in the Q&A document there's a question about that and they're very specific that they're not allowing contractors to be part of the wages and one thing to point out the logic of it is that the contract contractors can actually apply for this PPP money themselves so they didn't want to doubling up where the contractors um we're getting the money and then the getting the money also and that was a reasoning behind it so a couple more questions so the two million dollar mark for revenue is that this year 2020 or last year 2019 so the two million dollars has to do with the amount of money that you've borrowed so if you've borrowed and actually Kathy if you could go to the on the application it's the third page of the application in it it starts off it says PPP loan forgiveness calculation form yeah if you look at it kind of a little bit down towards the middle it says if Burrell received PPP loans in excess of 2 million dollars check here so they're really just trying to get a handle on who borrowed 2 million dollars more than 2 million dollars under this program and you're you're more likely than not going to be subject to a different level of review than if you borrowed under that amount it's a fairly automatic forgiveness process based on what we just talked about when you're under two million dollars and when you're over two million dollars there's a significant certification that you have to make when you borrow this money in that you had an economic need for this money in order to maintain your operations and that you had economic uncertainty and if they determine you know through a review process that you had alternative sources of liquidity there's some question about how they're going to look at a line of credit availability you know they might consider that to be liquidity if they look if they see that you've got significant reserves in the bank if they see that really there wasn't any economic uncertainty and your business has just been trucking along as usual and it's unaffected all of those things would be a negative in regard to them determining that you really were eligible for this money and they might require you to pay it back now the good news is if they go if they on review your loan and determine that well we're really thinking you had liquidity and did not have economic uncertainty and really should have taken this money they're just going to require to be paid back and they're saying that they're not going to try to pursue any sort of federal penalties or anything like that so there's a lot of concern before that what's making people nervous almost too much on the other side of things where there are people paying back money that maybe they should have been paying back because they did have economic uncertainty but they still weren't sure how the SBA was going to interpret that and now they're just saying look we're just gonna hold it against you or just we'll make you pay it back so a couple more can you prepay 401k employer contributions so the way the way it's worded at the moment it does appear to be cash basis in regard to what's considered to be payroll and that that's actually part of the payroll computation in the employer portion of pension contributions but you know one thing to be careful of your banker is going to be interpreting this guidance and you could have one banker than interprets this differently than another and says well that's really not appropriate we're not gonna allow it and you might have another one that says well I'm good with that you know we are gonna allow it so you have to be careful about things like that but the way it's worded at the moment it's they're saying that payroll is what you have actually paid which this would be part of payroll as far as how they're defining it and and then at the end like I mentioned if you've incurred payroll and I'm paid it at a later date they're allowing that also so one one thing Cathy so on this screen that you've got up here I just wanted to show this to everybody because this is a good summary of what's forgiven and it's got line one the payroll cost and remember you've got to meet those three tests in order to be able to include the payroll costs it's got the mortgage interest payments it's got the lease payments and the utility payments and then it goes through some math that kind of figures out if you've spent at least 75% on payroll and it will limit how much you're able to have forgiven if you haven't done that other pieces you want to show on there too no I think well you could kind of it's a very useful document because there's there's a lot of instructions there's another certification on the next page so be careful about these certifications like if you haven't taken out a PPP loan yet and you're getting ready to file an application to take out a PPP loan there's a certification once again that says that this was necessary and you have economic uncertainty and you need this money to operate your business and we're recommending that boards have a resolution in regard to that particular certification so that you know the board is exercising their governance authority you know over that particular certification and then but if you look at this here again we've got various certifications that you use the money appropriately you know that you haven't gone outside these threshold and here actually you can see this fourth ball it's got the fifteen thousand three eighty five max per individual and other certifications that you you've just done what you're supposed to do under this program because there there's some concern that there have been so many loans under this program that it's going to be difficult to monitor the compliance with the law and that's why you see these certifications so you you just want to take these seriously and make sure that you comply with the different provisions of this program and then if you page down a little bit further you can just see very detailed instructions so it's very likely that any question you might have in this session if you if you read this form you'll probably be able to answer it because there's there's a lot of detail in here about forgiveness there was a question about are they using gross or net payroll they are using gross okay um and then you know another another thing you know just a dimension here if you if you're having trouble finding this all you have to do is Google small SBA PPP and I'm sorry even easier than that Google Treasury gov and then PPP and you'll find all of t
is very quickly I think it's a very first link if you do that and remember this includes the employer payments on health insurance also so for payroll you've got your gross payroll limited to the fifteen thousand 385 you know per person for the eight week period of time you've got employer health insurance premiums and then you have employer pension benefits all of us combined if you want to maximize the forgiveness has to be at least 75 percent of them out that you borrowed and the only other thing just to note I doubt that anybody's gonna wait this long to apply for the forgiveness but there is an expiration date that we noticed on the form of October 31st 2020 go ahead Kathy I have a complicated question so if I had a specialized employee that worked an average of 10 hours a week in January but we don't need their services anymore can I bring another employee eliminate the position but then bring somebody else and give him the 10 hours for someone else that would be useful going forward so the FTE would be the same but the headcount down by one okay so they they're the ones that eliminated the position it wasn't the there there's a there's a rule that's in the Q&A that if you had somebody who left and they have chosen not to come back then that will not count against you as long as you have documentation that they have chosen not to come back and they're asking just to have that like in the form of a letter is considered to be good documentation now if you eliminated you know a position then you know that can hurt you in regard to your FTEs unless you've added somebody else and then that will increase your FTEs so the the FTEs are not employee specific it's just an FTE overall calculation it's not attached to any particular employee but the 25% reduction in wages that is tied to individual employees if you have a situation where you've had to cut wages by more than 25% so a couple people want to know about applying for forgiveness should they wait to hear from the bank how long should they wait is there particular day no think about I think for most people they're gonna go through the eight-week period of time now the eight-week period of time might end up being let's say ten weeks let's say you've got a payroll you get the money today but your next payroll is nothing for two weeks from now then your payroll eight weeks starts two weeks from now so let's just say that worst case scenario it takes ten weeks to meet the requirements under this program you know as far as spending the money then most people are going to apply right then and then there's actually a law that the bank has to process your application within 60 days so you'll know pretty quickly that your application has been approved you know within that time frame and it's pretty if you're under the 2 million dollars it's fairly cut and dry you know by the math you know you pretty much has spit it on payroll or you haven't and you've spent it on these other things like your utilities and interest payments if it's 2 million dollars or more they're going to be looking pretty hard at the economic uncertainty certification and it might not be as cut-and-dry and I've read that they have literally they don't have 60 days to make a determination in regard to that that you know the audit period could extend even into a period of years so you might have a little bit more uncertain people if you have 2 million or more what if I had to pay a lot of overtime during that eight-week period or yeah that that actually helps once again because you've got more wages that that gets you to your 75% of of your total loan amount in wages so that's that that helps and that that's kind of you know once again what they're looking for they're really wanting this money to get into the hands of employees and it could be other time I counted it's more a one more FTE no no well FTE calculation is based on a 40-hour week so if somebody you know works like I said 40 hours the whole time that's one FTE if somebody works 20 hours for the 8 week period of time every week that's a half an FTE so that's just that's how the math works and you have to calculate it just based on the amount of time that people work so if they work 60 hours it's not a one and a half know it that's a one-time FTE and then when you're calculating your base period cause remember you were comparing the eight weeks to your base period you do the same thing so you're comparing apples to apples what about hero bonuses during an eight week period what if I staff had been really working that yeah that we're not you know I was reading a little bit about this bonus they're more worried about owners receiving bonuses because that could be a signal of you know just kind of playing around with us a little bit but I think that as long as it's an employee and you can justify the bonus and it's you know there's economic reason for the bonus as long as it doesn't exceed this 15,000 385 per individual you should be good and then people are asking about payroll taxes by god what's included so employer share a clue okay there was some early confusion about that that the SVA once again clarified on the Q&A so if you look at the Q&A you'll you'll see a question on that but gross wages already includes the employer I'm sorry the employee portion of FICA and Medicare so long as you're picking the gross wage number it includes that now--he employer portion a fight that Medicare that is not part of this calculation that's you can't be reimbursed for that portion okay I'm gonna drop my get you back because I just looked at the time and get the screen share back so you can talk about the tax relief yeah [Music] all right Thank You Kathy next we'll just briefly go through this and then roll on into you just have a last bit related to filing guidance and things specific to nonprofits so of course there's a summary for some of the compensation benefits and payroll relief that's out there retention and leave Kay roll credits deferral distributions and such so if you want to move on to the next slide we can talk a little bit about this I'm on the next slide we've just have some information about the payroll tax deferral I'm the thing to know is the payroll deferral program not available if you have the SBA loan forgiveness but I know Jeff you were mentioning earlier that there's been some clients we're up to the point that you receive the SBA loan they've been able to take advantage of that I didn't if you wanted to share anything related to that right so so that this program allows you to defer the payroll taxes you know so once again the FICA tax is for the employer portion a payroll tax up you know till the first you'd have to split it into whatever you're deferring in the first amount is due December 31st 2021 and then second half is due December 31st 2022 so pretty significant deferral and we had a client that figured this out themselves that you were actually eligible for this deferral so any any payroll taxes employer payroll taxes that you you incur up until you get your PPP loan um you could apply to this program and defer it for these these two periods so but once you receive the money you know under the PPP program then you're not eligible for any further a payroll tax deferral and I can't say that I've been a big fan of this because you do it to pay a back there's no forgiveness here and you really unless you're having significant cash flow issues you're really just kind of putting off an obligation that you might regret you know once you get into 2021 in 2022 but we've had a few clients that have have taken advantage of this just because they really had to because of cash flow needs and next slide please there's a employer retention credit the employer retention credit really there's eligibility really you suspended full or partial you know from the result of government shutdown and and such and then one thing to know governmental employers are not eligible for the credit and there's a lot of information on this slide but everyone you're left just talking about basically the credit again there's just security taxes and such and have a little bit more information related to the paid leave portion of this it's on the next slide and the pigley provision these are some of the different areas where private employers with of course 500 or fewer employees the count number of employees on the date of leave just you know a little bit of information about this as well but just basically having this paid leave provisions and then the next slide it just talks about the triggers for this so we'll just kind of briefly walk you through this as in the interest of everybody's time Elysa I I meant just in general on the bank lawyer on the employer retention credit in order to qualify for that you have to have at least a 50% reduction in quarterly recent receipts measured year after year and/or your operation would have had to been suspended entirely as a result of a government order so it's it can be difficult to qualify for that but we understand and we know there's some people out there that can qualify for it and then basically you get a credit of up to 50% of wages that you pay Mack singing out at $10,000 so it's pretty significant provisions there on the paid leave provisions we always just tell people that you know if you have somebody who has to be home because they have the virus or a family member that they're taking care of that has the virus there's credits that you can receive directly off your payroll taxes that help pay for that and then and then there's family leave provisions where once again you can receive a credit directly off your payroll taxes and that's how they're passing the money through and practically what we have seen since they have come out with the $600 a week federal unemployment provision and you add that Center dollars on to the three hundred dollars that you were going to get before through the state of Georgia so basically $900 a week most people are furloughing employees when certain events happen that might qualify for these paid leave provisions because that's more money than they would have received through the paid leave provisions so it's just something to keep in mind you know if there's a furlough that's necessary as a result of the of Coe bid those unemployment provisions are very significant right now and they're set to expire at the end of July and depending on what happens with the economy they could be extended okay and then next slide there are some additional cares at compensation and benefit provisions related as student loan assistance um employers may contribute up to five thousand two hundred fifty dollar tax-free towards student loans of employees plan distributions required minimum distributions for defined contribution plans an IRA suspended for 2020 plan withdrawals and repayments so for certain taxpayers personally impacted with covin nineteen plan withdrawals up to a hundred thousand dollars permitted without that early withdrawal penalty the plan loan limit planned loan limits usually for 180 days from enacted is increased to two hundred thousand dollars and then funding required funding for Clyde plan extended through December 31 2020 and then on the next slide there's some other things we just wanted to talk about specific with nonprofits and hopefully a lot of you have heard this as well tax refer return filing deadlines of course probably most of you on this call or filing the form 990 which if you were up against a deadline whether you were twelve thirty one with your first deadline being due May fifteenth it's been extended to July fifteenth or if you were at a final due date because of a June 30th year-end and then your final was been due May fifteenth that's also extended to July 15th now most of the state's early on there was conflicting information but most of the states have chose to follow those new IRS deadlines as well you know if you all follow this there's talk now to change this to September so what wait but they're talking about individual and business extensions until September but nothing's been determined on that yeah and then there's you know we're just recommending and some information out there about like if you overpaid of course you know whether it might be parking tax or something like that that was repealed and for estimated taxes and such to go ahead and file as quickly as you can the form 4460 fixed so that way you can actually get that to carryover and then the next slide related to individuals there's been a change for the new 2020 tax year basically there's an above the line charitable contribution of up to three hundred dollars to individuals who don't otherwise itemized you know if you think about if you have to qualify for itemizing your deductions um you wouldn't be able to take that as a charitable contribution but now there's an above the line ability to be able to donate and take that 300 dollar deduction so we're hoping of course that will help nonprofits maybe open it up to some others that have not normally given or you know where they're I'm kind of looking for a tax deduction in that area and then for other other itemized errs from its charitable contribution deduction up to a hundred percent of adjusted gross income I believe it was sixty percent before so that's a big change for those large donors are able to give up to a hundred percent of their AGI so that's another good area for nonprofits on corporations they're allowed to permits a deduction of twenty five percent of taxable income and that was up from 10 percent previously and then contributions made in cash in twenty twenty Q public charity basically and these are in areas of the cash for the contributions made to supporting orgs and donor advised funds in this area and then on the next slide we just have some quick information we want to keep you on time about affiliation rules we've had a lot of this question surrounding like a supporting organization or some other type of any that's a that rolls up affiliation and how and what entity actually you know can apply for the loans how that works where your employees actually rest it really comes down to the key the power to control items of consideration of course ownership joint ventures all these different areas but we can answer kind of help you through we've helped a lot of clients through specific questions related to this factor when it comes to others trying to get funding so we didn't really we were talking mostly about forgiveness on this call but if you're applying for the loan one of the primary provisions is that you have less than 500 employees and you have to consider affiliations like if you've got common management with related entities you have to look at the number of employees together to see if you're under that 500 number and then if you don't meet the 500 rule don't just think that that's the end of it you can plug in the type of organization you are and there's a certain revenue threshold to that you might meet where you might be over 500 employees but you meet the revenue threshold and you still qualify for the PPP loan but pay attention to affiliations because it could affect you know if you qualify or not and there's a lot of information once again on the treasury gov website about affiliations yeah and if you need the information about the standard I mean like a good example generally like in the higher education or nonprofit world even though they may have over 500 employees they can go up to 30 million in revenue so there's a lot of exceptions out there based on the different industry codes couple question so if I got three thousand from the Eid al the disaster money three employee does this impact my forgiveness on the PPP yes it does it will it will reduce your forgiveness by $3,000 okay and can I pay sick leave Kovac 19 related sickly yes and my play well yeah and that's that's specifically included that's that's been another I think that was in the Q&A also and yes you can and then I give a health and wellness reimbursement each month it comes out like a bonus payroll with taxes deduction does that does that count yeah anything that's in box one which it sounds like that's what that is that does count as long as it's taxable compensation we
l I'm sorry and I don't want to confuse everybody it's not just box one because if they've got but they've got withholdings for things like insurance or pension you have to consider that but it is it does include everything that's gross wages so it sounds like it does this questions about the bank's determining forgiveness as if it's their own opinion or they simply ensuring that you spent the funds correctly based on the government guideline yeah that's what they're doing they're gonna be taking all these guidelines that we've been talking about and interpreting those and I'll give you an example of some interpretation like transportation we think that transportation means fuel we don't really know so you could have like I said one bank that interprets that differently than another there there are some unanswered questions that we might not ever get an answer to so there's a little bit of interpretation hopefully with this guy means you won't see a lot of variance because there's a lot of detail on this loan forgiveness application okay see let me keep going up I think I've got the questions anybody else questions so this I'm not sure I can understand a question can any business choose to use their FTE at the time of application period as January 1 through February 29 or is it just new one know any any business can do that ok I think that's it for questions so we should just thank you so much we will be we recorded this we will be posting it can we post the application and instructions you sent us on our website yeah yeah it's all public documents great ok thank you very much yeah and thank you for everyone today yeah thank you thank you much appreciated everyone please take care all right thank you very much you you
