Dive Brief:
- The American Institute of CPAs (AICPA) announced it is giving free access to a paycheck protection program (PPP) loan forgiveness tool it created with its technology partners.
- Companies and other entities that received a PPP loan to help them get through the pandemic can get the loan forgiven if they used the funds mainly to keep employees on payroll.
- AICPA partnered with CPA.com and Bizz2Credit to develop the tool as a simplified way of calculating eligibility and then applying for forgiveness.
Dive Insight:
To be eligible for forgiveness, organizations are required to use at least 60% of their funds to keep people on the payroll. The rest of the funds must go to other eligible expenses: mortgage interest, rent and utility costs.
Any amount that doesn't meet the criteria for forgiveness will have to be repaid. Repayment is over five years at 1% interest.
For amounts that are forgiven, the IRS said, organizations won't be able to take their usual federal income tax deductions for payroll, rent, and other business expenses. Organizations have been critical of that rule, and some members of Congress are seeking to change it.
Simplified forgiveness form
The IRS, earlier this year, released a simplified forgiveness form for organizations that can show they didn't reduce employee pay by at least 25% or cut any employee hours.
Organizations that can't show they meet that 25% standard can still apply for forgiveness, but must use a more detailed form.
The AICPA tool is part of a larger portal, called CPALoanPortal.com, finance leaders can use for several purposes. Some uses require a fee, but the PPP loan forgiveness tool is free and doesn't require AICPA membership, though it does require registration.
AICPA's tool includes a loan-forgiveness calculator, all government forms required under the PPP program, and supports calculations for payroll and other expenses, AICPA said. The tool also produces a master report with the applicant’s electronic signature that can be delivered to the underwriting lender.
