Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 70985 times)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2040 on: July 09, 2020, 10:59:54 AM »
Ppp forgiveness is not taxable. What about the 1k eidl grant?
If eidl is taxable, is there a way to return an eidl grant received before ppp, since it affects ppp forgiveness on that 1k, and you would rather have that 1k come as ppp, so it isn't taxed.

I can't really think of a scenario where it matters since all expenses paid with PPP are not considered deductions.

So PPP would look something like this:
Payroll Expenses:
50,000 (let's say this is 8 weeks payroll)
-50,000 (your PPP loan forgiveness)
Total Payroll Expenses: $0

EIDL would look something like this:
Payroll Expenses:
1,000
Total Payroll Expenses: $1,000
Other Income:
+1,000 (EIDL grant)
Total Other Income: $1,000
Net Income: $0

A combination of the two would look something like this:
Payroll Expenses:
50,000 (let's say this is 8 weeks payroll)
-49,000 (your PPP loan forgiveness)
Total Payroll Expenses: $1,000
Other Income:
+1,000 (EIDL grant)
Total Other Income: $1,000
Net Income: $0

And on the balance sheet:
Cash:
+1,000 (EIDL grant)
-1,000 (PPP repayment)
Net Cash: $0

Loans:
+1,000 (PPP unforgivable portion)
-1,000 (cash [taken from EIDL grant])
Net loans: $0

Offline beeweegee

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2041 on: July 09, 2020, 01:50:20 PM »
A sole prop who received a PPP loan to cover payroll can't also receive the $1000 EIDL grant (without reducing their PPP forgiveness), right?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2042 on: July 09, 2020, 02:07:10 PM »
A sole prop who received a PPP loan to cover payroll can't also receive the $1000 EIDL grant (without reducing their PPP forgiveness), right?

If it's the same EIN/SSN, correct.

Offline Deal Guy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2043 on: July 09, 2020, 02:33:12 PM »
I can't really think of a scenario where it matters since all expenses paid with PPP are not considered deductions.

So PPP would look something like this:
Payroll Expenses:
50,000 (let's say this is 8 weeks payroll)
-50,000 (your PPP loan forgiveness)
Total Payroll Expenses: $0

EIDL would look something like this:
Payroll Expenses:
1,000
Total Payroll Expenses: $1,000
Other Income:
+1,000 (EIDL grant)
Total Other Income: $1,000
Net Income: $0

A combination of the two would look something like this:
Payroll Expenses:
50,000 (let's say this is 8 weeks payroll)
-49,000 (your PPP loan forgiveness)
Total Payroll Expenses: $1,000
Other Income:
+1,000 (EIDL grant)
Total Other Income: $1,000
Net Income: $0

And on the balance sheet:
Cash:
+1,000 (EIDL grant)
-1,000 (PPP repayment)
Net Cash: $0

Loans:
+1,000 (PPP unforgivable portion)
-1,000 (cash [taken from EIDL grant])
Net loans: $0
If eidl 1k grant is taxable, i would assume it would end up needing to be reported somewhere in your 2020 tax return.

So if someone is self employed without any payroll, your agi and taxable income would go up by 1k.  On the other hand, all the ppp forgivable amount would go nowhere on your tax return.
« Last Edit: July 09, 2020, 03:17:10 PM by Deal Guy »

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2044 on: July 09, 2020, 03:08:10 PM »
If eidl 1k grant is taxable, i would assume it would end up needing to be reported somewhere in your 2020 tax return.

So if someone is self employed, your agi and taxable income would go up by 1k.  On the other hand, all the ppp forgivable amount would go nowhere on your tax return.

This would only apply if you had absolutely no expenses on your Schedule C.

I'm not clear on how Schedule C would look like in 2020 with PPP- if you had employees you'd need to deduct PPP from your employee wages, but the portion that went to the owner would have no corresponding deduction? I feel like I'm missing something.

Offline shulemw

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2045 on: July 09, 2020, 05:50:21 PM »
If i apply for the EIDL as a sole how can I use the funds? Anything for my needs in life?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2046 on: July 09, 2020, 06:21:21 PM »
If i apply for the EIDL as a sole how can I use the funds? Anything for my needs in life?

Check your 2019 Schedule C deductions. That's a good guide for what is considered "business expenses" for you.

Offline JuryDuty

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2047 on: July 10, 2020, 11:22:14 AM »
I applied for an eidl as a sole proprietorship (I just wanted the grant). They deposited $1k in my bank account and also gave me the option to accept a $1k loan. Are these the same thing? Do I need to accept the loan for a grant? Or do I reject the loan and I'll keep the $1k deposit? Or is the deposit the same thing as the loan and there is no grant?
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Offline nafnaf12

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2048 on: July 10, 2020, 11:26:01 AM »
I applied for an eidl as a sole proprietorship (I just wanted the grant). They deposited $1k in my bank account and also gave me the option to accept a $1k loan. Are these the same thing? Do I need to accept the loan for a grant? Or do I reject the loan and I'll keep the $1k deposit? Or is the deposit the same thing as the loan and there is no grant?
based on the previous posts, the first batch is the grant, you do not have to accept the loan.
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Offline JuryDuty

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2049 on: July 10, 2020, 11:27:08 AM »
based on the previous posts, the first batch is the grant, you do not have to accept the loan.
Glad to hear the turn around time was so quick.


So I reject the loan, and the $1k stays in my account, correct?
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Offline cholent

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2050 on: July 10, 2020, 11:28:31 AM »
So I reject the loan, and the $1k stays in my account, correct?
Yes. I accepted by mistake and now having a hard time figuring out how to pay it back immediately
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Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2051 on: July 10, 2020, 11:31:57 AM »
I applied for an eidl as a sole proprietorship (I just wanted the grant). They deposited $1k in my bank account and also gave me the option to accept a $1k loan. Are these the same thing? Do I need to accept the loan for a grant? Or do I reject the loan and I'll keep the $1k deposit? Or is the deposit the same thing as the loan and there is no grant?

There’s no “deposit” the $1k that posted to your account is a grant, and you can keep it even if you reject the loan offer.
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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2052 on: July 10, 2020, 11:42:27 AM »
There's no option to reject the loan, I assume I should just not accept it, correct?
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Offline cholent

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2053 on: July 10, 2020, 11:44:15 AM »
There's no option to reject the loan, I assume I should just not accept it, correct?
Correct
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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2054 on: July 10, 2020, 01:39:27 PM »
I just helped someone apply through Bluevine, application was submitted 1:09pm, got the email to sign docs at 1:10, loan was approved at 1:11.  8)