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Questions?

Please feel free to contact us

661-837-1100

Bakersfield

714-794-4680

Orange County

702-217-0660

Las Vegas

661-837-1100

Los Angeles

PPP Loan forgiveness (Huntington Beach, CA)

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Back Taxes Relief

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Offer In Compromise

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

PPP Loan Forgiveness

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Tax Relief

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Tax Lien Removal Service

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Unfiled Tax Returns

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Wage Garnishments

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Wage Levy

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

One of the things that make the United States the great country it is, is the huge number of small businesses that help keep the economy afloat. Unfortunately, the COVID-19 pandemic has placed many of these small businesses in danger of falling under. That’s why the federal government enacted the CARES Act to ensure that small businesses, their owners, and their employees were protected during these hard times. Here’s what you need to know.

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

What is the PPP Loan Forgiveness in Huntington Beach, California?

The Paycheck Protection Program, otherwise known as the PPP, originated from a bill passed by the Federal Government back in March of 2020. This bill, passed in the Coronavirus Aid, Relief, and Economic Securities (CARES) Act, was designed to help small businesses during these uncertain times. The PPP was one of the main measures of the Act and is the topic of discussion amongst small business owners.

Originally, the bill was supposed to provide $350-billion on loans in order to protect small businesses for eight-weeks through 100% federally guaranteed loans. These loans are backed by the Small Business Administration (SBA), which is also giving out SBA disaster loans during this time. As it became more and more clear that the pandemic wasn’t ending anytime soon, another $310-billion in loans were tacked on. Since the inception of the pill, the PPP Flexibility Act has made it easier to spend the funds and get the loan fully forgiven.

How Much Money Can You Get?

The number one question we get asked about the PPP program is just how much money is it possible to receive? The highest amount you are eligible to receive from your SBA-approved lender is your monthly average payroll cost in 2019, multiplied by 2.5. There is a maximum of $10 million. 

The calculations used to determine how much you will receive will differ if you are a seasonal employer. If this is the case for you, your lender will use a 12-week period beginning either February 15, 2019 or March 1, 2019, and ending June 30, 2019. If your business did not exist during either of these periods, your lender will look at your costs in January and February 2020.

How Should You Use This Money

While the loans are helping keep small businesses alive and business owners can take a deep breath knowing these loans can be forgiven, there are still stipulations to how this money can be spent. You MUST use at least 60% of the funds to pay your payroll and benefits costs. You must use the remaining 40% of the funds on:

  • Mortgage interest payments
  • Rent and lease payments
  • Utilities

If you follow these guidelines, you should have no issues getting your loans forgiven. They will eventually turn into a tax-free grant. However, failing to spend these funds the way they were attended may get you charged with fraud. You will be required to verify that you spent the funds appropriately. 

There is a Salary Cap

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

It is important to note that there is a salary cap for individuals who make over a certain amount of money per year. Payroll expenses are capped for individuals who earn over $100,000 per year. This means that if you or any of your employees had an annual salary of over $100,000 in 2019, you can only claim the $100,000 and nothing over it.

So this means if you had an employee who made $130,000 last year, you would take away $30,000 from their salary for the purpose of the PPP. This would leave you with $8,333 as a monthly average payroll. If you are a sole proprietor or independent contractor without payroll and your net profit was over $100,000 in 2019, this will also be capped at $100,000. You would divide this by 12 to get $8,333.33 as your monthly average payroll.

A Reduced Workforce May Affect Your Application

Unfortunately, many businesses have had to cut members of their staff or cut payroll in order to survive the economic downturn. If this is the case, your application may be negatively affected. This is because the loan essentially forces you to commit to maintaining the average number of monthly full-time equivalent employees. 

Now, you can still achieve forgiveness if you plan on rehiring them or restoring their pay for their typical work hours. If you can prove by December 31st that you’ve maintained the salary and wages of your employees and that their pay hasn’t dropped below 25% of the stated monthly average, you will have a strong application.

What If an Employee Doesn’t Wish to be Re-Hired?

It’s also grown increasingly common for laid off or furloughed employees to decline being re-hired, mainly for safety reasons. This can lead to confusion when applying for PPP loan forgiveness in Huntington Beach, California. However, if an employee rejects your re-employment offer, you may be allowed to exclude said employee when calculating forgiveness. Here is how you can qualify for this exemption:

  • You need to provide a written offer to rehire in good faith
  • You must have offered to rehire for the same salary and number of hours as before
  • There must be documentation of the employee’s rejection

It should be noted and understood by any of your laid off or furloughed employees that anyone who rejects offers for re-employment is no longer eligible for continued unemployment benefits. 

The Tax Crisis Institute is Here to Help

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

We understand that many of this can be completely impossible to understand, especially to the layman with little tax experience. That’s why our expert staff here at the Tax Crisis Institute is here to help with any questions you may have about PPP Loan Forgiveness in Huntington Beach, California. When you work with us we will work with you every step of the way to ensure your small business is getting the loans you are entitled to while also getting said loans forgiven. Contact us today to find out how we can help.

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Back Taxes Relief

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Offer In Compromise

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Payment Protection

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Tax Relief

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Tax Lien Removal Service

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Unfiled Tax Returns

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Wage Garnishments

Paycheck Protection Program Loan Forgiveness Huntington Beach (Orange County)

Wage Levy

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