Posted by
Yonina F. Shineweather, CPA
| August 12, 2020
After 30 years in the payroll industry – 29 of them working for a payroll service provider (PSP) – I thought I had heard it all. I thought that three decades had given me the opportunity to wear every hat possible: customer service advocate, tax deposit accountant, penalty abatement petitioner, employee handbook author, benefits consultant, unemployment claims arbitrator, ACA seminar and webinar presenter . . . you get the idea. Well, I thought I had worn every hat possible. Enter COVID-19 and the SBA’s Paycheck Protection Program – and a new hat for me and the entire Viventium team: loan application and forgiveness payroll data extractors. We all know that the amount of your PPP loan as well as how much of it will “be forgiven” – meaning turned into a grant – hinges on your payroll details. Questions like the following determine how much money you receive – and get to keep:
This information is for educational purposes only, and not to provide specific legal advice. This may not reflect the most recent developments in the law and may not be applicable to a particular situation or jurisdiction.
- How much did I pay my employees during 2.5 months of 2019?
- How much state unemployment tax did I pay during those same 2.5 months?
- How do my full-time equivalents (FTEs) during my PPP covered period compare to my FTEs during my lookback period?
- Did I reduce employees’ salaries by more than 25% during my covered period compared to my lookback period? And if so, did any of those employees earn an annualized equivalent of $100,000 in 2019?
- It’s perfectly acceptable to the SBA for an employer to switch PSPs before, during, and after a PPP loan. What the SBA is interested in is accurate data, not which outsourcer is providing it. It doesn’t even ask who your PSP is. You may choose to attach a report with the logo of your PSP, but the SBA will ignore the logo and focus on the numbers.
- The SBA won’t accept forgiveness applications until August 10 at the earliest. It may push that even later to allow itself time to issue guidance or to incorporate the PPP expansions that Congress is now debating. From the time you submit your forgiveness application, your lender has 60 days to issue a preliminary determination. Then, the SBA has an additional 90 days to agree to pay off your loan to your bank – thus turning your loan into a grant. So, the process can take up to 5 months from the time that you submit your application – and we don’t even know for certain yet when the SBA will open its forgiveness application season. If you have reasons that you’d like to switch to a new PSP, waiting is not the wise choice, especially if your new PSP knows PPP inside and out (as Viventium does!) and exactly which data to transfer over – more about that below.
- To meet the SBA’s “accurate data” standards, follow 3 best practices when switching PSPs during PPP. Here we go:
The 3 Best Practices You’ll Want to Follow When Switching PSPs During PPP
- Make Sure Your New PSP Loves the Details:
- Make Sure Your New PSP Includes PPP in Its Scope:
- Make Sure Your New PSP Has the Subject Matter Experts Who Really Know How to Take PPP Apart and Put It Back Together Again:
This information is for educational purposes only, and not to provide specific legal advice. This may not reflect the most recent developments in the law and may not be applicable to a particular situation or jurisdiction.