Happy Friday to all of you! It is April 17th and another chilly Friday here in Colorado.
 
Please accept our best wishes to each of you. I hope you continue to find something to put a smile on your face every day. At the MHA office in Lakewood, and at our extended “remote” home-offices in Denver, Littleton, Englewood and Pine, we continue to help our clients, our kids, and our families as we also work to find small moments to make us smile.
 
Thank you to so many who have reached out this week to say “hi” or to let us know that all is good. We truly love to hear from you!
 
For clients of the Firm, I wanted to let you know that Kim Sears, our Sharefile guru, is taking a much needed and well deserved long weekend. If you need something that can wait until Tuesday then she will get that for you. If, however, you are dealing with PPP/EIDL loan requests or anything time sensitive then please email me directly at Kim@mcnurlincpa.com . I will work with the managers and make sure you have what you need.
 
Many of you received your Economic Impact Payment this week which was great news. If you did not receive your payment, please go on line to www.irs.gov and click on the button that says “Economic Impact Payments” or the button that says “Get My Payment”. You will need to enter your social security number, birth date, street address and zip code. From there, the IRS will let you know if they have calculated a payment due to you, and it may also give you the chance to enter your direct deposit information. I have heard of many people getting the message that “we cannot determine your eligibility for a payment at this time”. We believe this means that you are a SSA recipient, you may be over their threshold, or that something entered was incorrect. The IRS has reported other reasons for this message as well. They recommend that you check back next week.
 
If you do not receive the advance, you are not necessarily out of luck. According to reports issued by Congress, a person who has lower income or more dependents in 2020 would qualify to get the additional stimulus payment as a tax credit on your 2020 tax return filing.
 
Last week, I told you the State of Colorado postponed the payment due date for your property taxes and sales taxes but we received some clarification on this today. If you pay your sales tax on the postponed date, you lose the early payment discount. If you can pay your Colorado sales tax by Monday then it would still qualify for the discount. Property taxes that were due in April are now due April and June.
 
I also mentioned scams last week and I want to talk about them again this week. They are very realistic. Please do not return calls, do not click on links, double and triple check your email senders before you engage in any sort of communication. Recent scams included one where they promised an extended warranty and one where they “reminded” you of a package waiting at FedEx. Please be vigilant and don’t fall for these scams.
 
This week the SBA reported that all $349B allocated funds for the PPP Loans have been earmarked. Congress is talking about sending more funds and we will keep an eye out but, for now, your remaining option is the EIDL program. The application for the EIDL is on the SBA website. Once you complete the application, the team at the SBA will process it and send you an email to let you know the maximum loan that you could obtain under the EIDL program. They will also advance some of this loan to you automatically. This loan has to be repaid in 30 years and it generally carries a 3.1% interest rate.
 
The big focus this week has shifted from obtaining the PPP Loan to forgiveness of the PPP Loan. This is an ongoing topic that we will continue to research. For now, the important things to know are that your 8 week clock starts when the funds show up in your bank account and the spending of those funds is restricted. My understanding is that employers have to maintain the same number of Full-time Equivalent (FTE) workers and pay them at least 75% of their pre-COVID-19 wages. At least 75% of the loan must be spent on qualified payroll. There is a per employee limit to wages of $100,000/person but the SBA recently clarified that the cap can go over $100,000 for group health insurance premiums, retirement contributions and certain payroll taxes. The remaining 25% can be spent on other qualified expenses which generally include utilities, mortgage interest and rent for obligations that were in place prior to February 15th.
 
Another big question regarding the PPP Loan forgiveness is the tax impact. Most professionals agree that the the forgiveness, itself, is not taxable. We are not certain, however, if the expenses paid with the loan proceeds will ultimately be deductible. We are watching this closely and understand that Congress is aware of this issue and is considering a legislative fix.  
 
Please continue to reach out with questions. I am happy to talk through some of the issues that we are facing as we move forward and through this crisis and your calls and emails are giving me good ideas for these update emails!
 
Take care and stay strong,
 
Kim Hitchcock, CPA
McNurlin, Hitchcock & Associates, P.C.