PAYCHECK PROTECTION PROGRAM (PPP) INFORMATION SHEET: 

BORROWERS 

The Paycheck Protection Program ( PPP ) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone. 

The loan amounts will be forgiven as long as: 

• The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and 
• Employee and compensation levels are maintained. 

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. 

Loan payments will be deferred for 6 months. 

April 15, 2020 tax filing deadline postponed

The  IRS issued Notice 2020-18 which supersedes Notice 2020-17 which was issued on March 18. The new notice affirms that the IRS will automatically treat July 15 as the new deadline for filing federal income tax returns and making federal income tax payments for all taxpayers, including individuals, corporations trusts and estates.

Summary of Tax Related Provisions:  CARES Act

Since the beginning of March, Congress has approved $8 billion in emergency funding and passed the Families First Coronavirus Response Act to help combat the effects of the coronavirus pandemic. The third and most impactful phase of this relief is the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), a momentous $2 trillion infusion into the economy which was signed into law on March 27th.

Rollovers as Business Start Ups (ROBs) Compliance:  the IRS View

Have you ever wondered what the IRS is thinking about Rollovers as Business Start Ups?  Wonder no more – they have a website page dedicated to this particular structure. The website page appears to be updated fairly regularly, and as of this blog date, the most recent update was October of 2016.

Our firm has been practicing in the federal tax area of self-directed IRAs and 401k plans used as business start-ups (commonly referred to as “ROBS”, AKA rollovers as business start ups) for over the past 10 years.  Little guidance has been forthcoming from the IRS or other governmental agencies, other than legal cases and certain published rulings and advisory opinions by the IRS and Department of Labor.