The AICPA reiterated its recommendation that the US Small Business Administration (SBA) delay the end of the Paycheck Protection Program (PPP) application period by at least 60 days and also urged the SBA to adopt new retroactive rules released this week to change the sole proprietorship formula. use to calculate their maximum loan amount.
In a statement released late Friday afternoon, the AICPA called “unfair” the SBA and Treasury decision that a new provisional final rule published on March 3 would only apply to loans made on or after that date. The IFR allows sole proprietors, independent contractors and self-employed persons who file Form 1040, Schedule C, Business profit or loss, to calculate their maximum loan amount using gross income instead of net profit. The decision not to make the new guidelines retroactive hurts Schedule C filers already approved for PPP loans, as loan maximums calculated using gross income are typically significantly higher than those using profit. net.
“We have heard from many CPAs and small businesses that those who chose to apply for a PPP loan before the new guidelines received a significantly lower amount than those who apply today,” said Barry Melancon, CPA, CGMA, President and CEO. of AICPA, in the press release.
The AICPA has also requested that the March 31 deadline for PPP applications be extended, in part because the changes imposed by the new IFR are significant enough that lenders cannot implement them in their PPP portals. for at least a week, says Mélançon. That would leave lenders, sole proprietors and CPAs advising business owners for just a few weeks to interpret the new guidelines, assemble the documentation and complete the application process, the AICPA said.
“The March 31 deadline just doesn’t make sense,” Melancon said.
The AICPA called on Congress earlier this week to extend the PPP deadline of March 31 due to late referrals and delays with the SBA’s PPP processing system.
AICPA experts discuss the latest PPP programs and other small business support programs at a virtual town hall held every two weeks. The webcasts, which offer CPE credits, are free for AICPA members and $ 39.99 for non-members. Go to AICPA Town Hall Series web page for more information and to register.
the AICPA Paycheck Protection Program Resource Page houses resources and tools produced by the AICPA to help cope with the economic impact of the coronavirus.
Accounting firms can prepare and process PPP applications on the CPA business financing portal, created by AICPA, CPA.com and fintech partner Biz2Credit.
For more information and stories on the coronavirus and how CPAs can handle the challenges of the outbreak, visit JofA‘s coronavirus resource page or subscribe to our email alerts for the latest PPP news.
– Jeff drew ([email protected]) is a JofA editor-in-chief.