ppp loan

[raymondmorin200]

PPP LOAN:  I HAVE A CLIENT WHO IS A SOLE PROPRIETOR, HAS NO EMPLOYEES AND WORKS OUT OF HIS HOUSE.  ALL OF HIS PPP LOAN WILL BE USED FOR PAYROLL.  WHEN I TOLD HIM I NEEDED TO DEDUCTION SOCIAL SECURITY AND MEDICARE FROM HIS PAYROLL, HE SAID HE DID NOT WANT ME TO ANYTHING FROM HIS PAYROLL.

HE FOUND ANOTHER ACCOUNTANT WHO IS NOT DEDUCTING ANYTHING FROM HIS PARYROLL.

ACCORDING TO THE PPP LOAN FORGIVENESS INSTRUCTIONS, FORM -941'S AND STATE WORKFORCE COMM. REPORTS MUST BE SUBMITTED WITH THE FORGIVENESS APPICATION. 

YOUR THOIGHTS?

RAY

[Just-Lisa-Now-]

I havent seen the forgiveness application, Square Capital hasnt made it available yet for me.

If he has NO employees, there are no 941's or state forms to submit.

The loan was based on net profit on Sch C, not reduced by SS/Mdcr so Im not sure you would need to make an adjustment for that for it to be forgiven.

[raymondmorin200]

JUST LISA NOW,

THE PPP LOAN MADE THE SOLE PRPPRIETOR AN "OWNER-EMPLOYEE" SO THAT HE COULD QUALIFY FOR THE PPP LOAN.  THEREFORE, I BELIEVE HE HAS TO HAVE PAYROLL TAXES DEDUCTED AND FILED TO THE APPROPRIATE AGENCIES.

RAY

[Just-Lisa-Now-]

But you had to submit a 2019 Sch C showing your net profit and the loan based on that figure (8/52 of your net profit) was supposed to be forgivable, at least that's the way it was explained when I filled out the application.

[BobKamman]

He found another accountant who is not deducting anything from his payroll.

Exactly what he should have done.  There are other new laws you need to learn before you lose any more clients.  

[raymondmorin200]

I HAVE LOOKED AND HAVE NOT FOUND THAT INFORMATION.  WHAT IS THE REFERENCE SO I CAN LOOK IT UP?  

RAY

[Just-Lisa-Now-]

There are lots of different YouTube videos walking through the 3805ez, you may want to search for one that walks through a sole prop, no employees situation to see how it works.

Heers one, I havent watched it yet though, but it says for self employed and independent contractors.

https://www.youtube.com/watch?v=10OEKfQgRfY

[raymondmorin200]

LISA,

THANK YOU,

RAY

[abctax55]

HAS NO EMPLOYEES AND WORKS OUT OF HIS HOUSE.  ALL OF HIS PPP LOAN WILL BE USED FOR PAYROLL. 

1)  PLEASE stop shouting at us

2) Your statement makes no sense.  No employees but the loan will be used for payroll ??

Self-employed folks could get PPP loans BUT it should have been based on net Sch C income.

[qbteachmt]

@raymondmorin200When using all CAPITAL letters, that is considered Rude to those that are trying to read your text to help. Please reconsider using all capital letters. Thanks.

The PPL does not turn your client into an Employee and does not create payroll or the need for payroll or even the condition of payroll. You have Income replacement, not a Payroll condition.

There was never Payroll for this person, so there never is anything to deduct from. There still is no Payroll for this person. If anyone is "doing payroll", they are making a mistake.

You know that this person will be submitting their Medicare and Social Security tax payment as part of their 1040 Quarterly estimates, as part of the 1040 is the Sched C, which then triggers the Sched SE as required. SE = the FICA equivalent of what the employer/employee would have for 941/944.

You don't change to 941/944 for this person, and it should not have been in use before the PPL, either.

[BobKamman]

It's not just rude to use all-caps, it makes it more difficult to find and correct the typographical errors before posting.  Of course, that applies only to those who actually review what they write, before clicking on "Post." 

The only question asked here is "YOUR THOIGHTS?"  See what I mean?  Is it too much to expect, that someone ask "Could it be that I missed something about these PPP rules?"