Updates & Office Hours
In light of the tremendous amount of questions I am getting, I am setting up weekly office hours so that I can help as many people as possible! Starting next Friday (2/12), I will be on Zoom every Friday at 2pm EST to answer any questions you have about PPP/ERC. Office hours are free and open to all - even non-camps! Please pre-register though. Sign up at the link below.
(I have also received a number of requests to help camps individually. You can still email me questions if you have them and I am looking into getting some help to be able to write individualized reports for each camp on how much they can claim and answering every scenario they are dealing with. Let me know if this is something you are interested in and what me to follow up on).
Some updates on PPP:
PPP #1 Increases: I’m told that the banks still don’t have clear instructions from SBA on how to apply for these. If anyone has been able to get their loan increase processed already, please let me know so I can share that info with everyone. For everyone else, just hold tight for another week or so.
PPP #2: I still recommend that you wait as long as possible to apply for PPP#2 so you can maximize your forgiveness window and your ERC funds. Every indication so far is that there is plenty of money available. I’ll post here if that changes and it’s time to move on your application.
For both PPP loans: It looks like the definition of Supplier Expenses should include food. We are still waiting for a definitive explanation from the SBA, but it is very likely that all food you buy for your kitchen during the forgiveness period can be included in your forgiveness. This will help you use more payroll towards ERC.
The most important thing you can be doing right now is getting your ERC in order for 2021 and using it to your advantage. Here are top things you should know about the ERC:
The ERC is what is called a “refundable” payroll tax credit. That’s a technical term that means the IRS will send you a check for whatever credit you claim. It does not matter how much payroll tax you pay or if you are a non-profit.
This program is a payroll tax program and you apply for the credit on your payroll tax forms. Your payroll provider (or accountant), not your bank, will submit the request for the credit with your payroll tax filing.
For 2020, if you qualify for the credit, you will be able to claim a credit towards 50% of the first $10,000 in wages for every employee in the covered quarters. So up to $5,000 per employee, for the whole year. This excludes any wages that you applied toward forgiveness or the CARES Act Paid Family Leave credits. You will be to apply for this credit retroactively by filing a 941x to the IRS (consult your payroll company and accountants).
In 2021, if you qualify for the credit, you will be able claim a credit towards 70% of the first $10,000 in wages for every employee, for every quarter. That’s up to $14,000 in credits per employee for wages paid from Jan 1 to June 30, 2021.
To qualify for the credit in 2021, your first quarter “gross receipts” (or revenue) in 2021 cannot exceed 80% of your gross receipts in either Quarter 1 of 2019 or Quarter 4 of 2020. Figure out what that 2019 number is RIGHT NOW, and start managing your revenue so ensure you qualify in 2021.
The rules on how to qualify for the credit and how to use it alongside your PPP funds are complicated. If you haven’t, make sure you read every word of my breakdown on it here. If you don’t read until the end, you may end up leaving tens of thousands of dollars on the table.
Once you determine that you will be able to qualify in 2021, you can start to put this credit into action for your camp right away. For example, for any additional staff you might want to hire to help prepare camp, you will only be paying the 30% of their first $10,000 in wages per quarter (plus the employer share of payroll taxes and workers comp).
So you want to hire someone to come paint a bunk right now for $20/hour, that’s only $6/hour for you!
I’m working on an excel spreadsheet calculator for everyone to use to calculate your ERC and PPP, and how to maximize it. Make sure you subscribe to updates so you get notified when it is ready.
If you have any questions, please ask in the comments.