Loan Funding Caps Reached And Economic Impact Payments

PPP Loan Funding Caps Reached

Note: This guidance was sent as a client alert on April 16, 2020 and the information is current as of that date.

Economic Impact Payments

The IRS processed and issued approximately 80 million economic impact payments this week via direct deposit. Based on early reports, there were issues with the $500 dependent payments and some checks were deposited into accounts that were no longer active. IRS and Treasury officials acknowledged they are aware of these issues and are working to fix them.

The IRS has launched a portal for taxpayers that have filed tax returns to verify or provide their direct deposit and address information. The portal will be available at  We have received numerous reports that the portal is providing an error message of “According to information that we have on file, we cannot determine your eligibility for a payment at this time.” We believe this is an issue with the IRS system and hope it will be corrected soon. If you receive this message, we suggest trying again in 24-48 hours. If you expect to receive a stimulus payment, and have not already, verifying and updating this information is important to ensure prompt receipt of funds.

Paycheck Protection Program (PPP) Loan Updates

As of today, April 16th, all allocated funds have been exhausted according to the Small Business Administration. Many applications were not funded and Congress is debating options to provide additional relief to small businesses. We encourage you to contact your senators and congressional representatives urging them to allocate additional funds to PPP loans.

Economic Injury Disaster Loan (EIDL) Updates

As of today, April 16th, the Small Business Administration has suspended new applications due to what they called a “lapse in appropriations”. Applications that were already submitted will continue to be processed on a first come, first serve basis. We encourage you to contact your senators and congressional representatives urging them to allocate additional funds to the EIDL program.

If you have applied for and received funds from the PPP or EIDL programs, please let us know which program and which bank provided the funding.

Paycheck Protection Program (PPP) Guidance Updates

The Small Business Administration issued a new interim final rule Tuesday that supplements the guidance for the Paycheck Protection Program (PPP) provided in the first interim final rule issued on April 2nd. The FAQs, which have been updated numerous times since they were initially posted, were also updated on Tuesday and Wednesday. The funds for this program are exhausted, but the information will be important if the program receives additional funding and for recipients of the grant prior to the funding cap being reached.

  • Self-employment income of partners in a partnership may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership (or LLC filing taxes as a partnership). Individual partners may not submit a separate PPP loan application as a self-employed individual.
  • The actual amount of loan forgiveness will depend, in part, on the total amount spent over the covered period on:
    • Payroll costs including salary, wages, and tips, up to $100,000 of annualized pay per employee (for eight weeks, a maximum of $15,385 per individual), as well as covered benefits for employees (but not owners), including health care expenses, retirement contributions, and state taxes imposed on employee payroll paid by the employer (such as unemployment insurance premiums)
    • Owner compensation replacement (Sch C owners), calculated based on 2019 net profit as described in Paragraph 1.b. above, with forgiveness of such amounts limited to eight weeks’ worth (8/52) of 2019 net profit, but excluding any qualified sick leave
    • Payments of interest on mortgage obligations on real or personal property incurred before February 15, 2020
    • Rent payments on lease agreements in force before February 15, 2020
    • Utility payments under service agreements dated before February 15, 2020

Source: PPP Loan – Interim Final Rule Release – April 14, 2020
Source: PPP Loan – FAQs – Last Updated April 15, 2020


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