What Should I be Doing to Prepare my Paycheck Protection Plan (PPP) application?
Updated: Oct 5, 2020
The CARES act was approved last Friday, and it has been a marathon of reading the bill, interpreting the bill, reviewing guidance from the SBA, US Chamber of Commerce, Treasury, and thought leadership pieces from every accountant, attorney and banker in the United States. And it's only Wednesday!!
As a small business owner, I have focused my efforts on the Paycheck Protection Program or PPP and wrote an extensive overview of the program and its implications earlier this week in my article entitled The Paycheck Protection Program Explained by a Fellow Small Business Owner.
It appears that small businesses will be able to start making application on Friday, April 3rd. The SBA has released a draft application and the Treasury has issued additional guidance. I would not waste a lot of time completing the SBA's draft application as many of the banks that are offering the PPP loans will likely have their own applications. However, the draft application will provide guidance.
Sample Application | Treasury Guidance
In the interim, I would spend some time getting familiar with your payroll processing software. 90% of the information that you need to make application is housed here. We use Paylocity and once you get comfortable with the user interface it is really intuitive.
In order to process your PPP application the bank is going to ask you to provide
2019 IRS Quarterly 940, 941 or 944 payroll tax reports
Last 12 months of Payroll Reports beginning with your last payroll date and going backwards 12 months (e.g. gross wages for each employee, paid time off for each employee, vacation pay for each employee)
1099s for 2019 for independent contractors that would otherwise be an employee of your business
Documentation showing total of all health insurance premiums paid by the Company Owner under a group health plan
Document the sum of all retirement plan funding that was paid by the Company Owner (do not include funding that came from the employee’s out of their paycheck deferrals)
If you are a Paylocity user, all of this information can be found in 2 reports. The last 12 months payroll, health insurance and retirement funding can be found in the Payroll Register Summary under Reports and Analytics > Reporting
Search for the report entitled Payroll Register Summary
