PPP 대출 상환 감면 업데이트

임금 보호 프로그램 (PPP, Paycheck Protection Program) 대출 상환 감면을 신청하려면 제출해야하는 서류에는 세가지 양식이 있다. PPP 상환 감면 신청서는 SBA가 아닌 대출 기관에 제출 해야한다. 이 세가지 양식을 설명하기 전에 서류제출기한일에 대해 먼저 검토해 보자.

서류제출기한

대출금은 커버 기간안에 사용이 되어야 한다. 커버 기간은 PPP 대출 지급일부터 시작되는8주치 에서 24주 치로 기간이 연장 되었으며, 2020년 6월 5일 전에 PPP 대출을 받았다면 8주치 커버 기간 사용을 선택 할수 있다. 커버 기간은 절대로 2020년 12월 31을 초과하여 연장 될수 없다.

모든 PPP 대출자들은 커버 기간이 끝난 후 추가 10개월의 시간이 있다. 2020년 8월 4일에 발표된 SBA Q&A에 따르면, 대출자가 커버 기간이 끝난 후 10개월 안에 상환감면신청서를 제출하는 한, SBA가 대출기관에 감면금액을 확정할 때까지는 대출자는 어떠한 대출금도 지급하지 않아도 된다.

예시 1:

Company X가 2020년 5월 1일에 PPP 대출을 받았다면, 더 짧은 커버 기간을 선택하지 않는 한, 커버 기간은2020년 10월 16일 (대출을 받은 후 24주) 에 끝난다. 그렇다면 상환감면신청서는 2021년 8월 15일 전에 대출기관에 제출되어야한다.

예시 2:

Company X가 2020년 5월 1일에 PPP 대출을 받았고, 8주 커버 기간을 선택했다면, 커버 기간은2020년 6월 26일에 끝난다. 그렇다면 상환감면신청서는 2021년 4월 26일 전에 대출기관에 제출되어야한다.

사용가능한 양식

대출자가 사용할 수 있는 신청서 양식은 세가지가 있고, 어떤 양식을 사용할지는 대출의 규모와 대출자의 자격에 따라 달라진다.

• Form 3508S (짧은 양식): Form 3508S는 총 PPP 대출금액이 $50,000미만일 때만 사용할 수 있다. 하지만, 제휴사들과 함께 받은 총 PPP 대출금액이 $2 million이상인 대출자는 이 양식을 사용할 수 없다. 이 2 페이지 양식은 작성이 매우 쉬우며, 대출자의 진술과 확인을 기반으로 상환 감면을 제공하도록 설계되었다. 추가 서류를 필요로 할 수 있기 때문에 이 양식을 작성하기 전에 대출기관에 문의하는 것이 좋겠다.

• Form 3508 EZ (EZ 양식): 대출자가 아래 나열된 세가지 자격 중 적어도 하나를 충족하는 경우, EZ 양식을 사용 할 수있다. 이 3 페이지 양식은 대출자가 복잡한 풀타임 노동시간과 연봉/시간당 임금 삭감을 계산하지 않아도 되기 때문에 Form 3508 (긴 양식) 에 비해 비교적 작성이 간단한 편이다. 추가 서류를 필요로 할 수 있기 때문에 이 양식을 작성하기 전에 대출기관에 문의하는 것이 좋겠다.
  1. 대출자는 자영업자, 독립 계약자, 또는 단독 소유주로 PPP 대출 신청 당시에 직원을 고용하고 있지 않았음.
  2. 대출자는 커버 기간에 직원의 연봉이나 시급을 2020 년 1월 1일과 2020년도 3월 31일 사이 기간과 비교했을때 25% 이상 삭감하지 않았고, 2020년 1월 1일부터 커버 기간이 끝날 때까지 직원 수나 평균 급여 시간을 삭감하지 않았음.
  3. 대출자는 커버 기간에 직원의 연봉이나 시급을 2020 년 1월 1일과 2020년도 3월 31일 사이 기간과 비교했을때 25% 이상 삭감하지 않았고, COVID-19와 관련된 연방, 주 및 지방 정부의 지침을 준수하기 위해 커버 기간에 2020년 2월 15일 전과 같은 수준의 사업 활동을 운영할 수 없었음.

• Form 3508 (긴 양식): Form 3508S 혹은 Form 3508EZ를 사용할 수 없는 대출자는 Form 3508을 사용해야한다. 이 11페이지로 구성된 양식은 각 직원의 풀타임 노동시간과 연봉/시간당 임금 삭감 계산을 해야하며, 자세한 내용과 뒷받침하는 작업시트를 필요로 한다. 이 양식을 작성해야하는 대출자는 충분한 resource를 확보하거나 전문적인 도움을 구하고 관련 작업을 일찍 시작하여 제 시간에 감면 신청 절차를 마무리할 것을 권장한다.

3508 EZ나 3508S 양식을 사용하는 대출자는 내부적으로 충분히 감면 신청이 가능할 것으로 보이나, 3508 (긴 양식) 사용자는 PPP 대출 상환 감면 계산 양식 지침 에 대한 충분한 이해가 필요할 것이며, 적절한 시간과 내부 인력을 준비해두어야 원활하게 감면 절차를 진행할 수 있을것이다. 만약 내부적인 resource가 없다면 전문적인 도움이 필요할 것이다.

PPP Loan Forgiveness Update

There are three different forms that need to be submitted to the lenders, along with other documentations and supports the lenders may require, in order to apply for forgiveness of PPP loan amount.  Note that application for PPP loan forgiveness is made with the lenders, not the SBA.  Before discussing these forms, let’s first understand when the borrowers need to apply.

Deadline

Loan proceeds must be spent within the covered period.  Covered period was extended from 8-week period to 24 week period immediately following disbursement of the loan or by December 31, 2020, whichever is earlier.  If you received the loan prior to June 5, 2020, you may choose the 8-week period covered period.  In other words, unless you choose to use 8-week period covered period, the covered period ends earlier of 24 weeks from the loan disbursement date or December 31, 2020.

Additionally, all PPP loan borrowers have additional 10 months after the last day of each borrower’s loan covered period.   SBA, in its Q&A published in August 4, 2020, provided that as long as a borrower submits its loan forgiveness application within 10 months of the completion of the covered period, the borrower is not required to make any payments until the forgiveness amount is remitted to the lender by SBA.

Example 1:

Assume that Company X received PPP loan on May 1, 2020.  The covered period for this loan ended on October 16, 2020 (24 weeks after receiving the loan), unless Company X elects to use a shorter covered period.  Then the application for the forgiveness must be filed with the lender before August 15, 2021.

Example 2:

Assume that Company X received PPP loan on May 1, 2020 and chooses to use 8-week period covered period.  The covered period for this loan ended on June 26, 2020.  Then the application for forgiveness must be filed with the lender before April 26, 2021.

Applicable Forms

There are three different forms borrowers can use and which form needs to be used is depended on the size of the loan and borrowers’ eligibility.

• Form 3508S (Short Form): A borrow may use Form 3508S only if the total PPP loan amount received was $50,000 or less.  However, a borrow that, together with its affiliates received PPP loan totaling $2 million or more may not use this short form.  This 2-page form is very easy to complete, and it is designed to provide forgiveness mainly based on borrowers’ representations and certifications.  Contact your lender before completing the form as they may require additional documentations and supports.

• Form 3508 EZ (EZ Form): A borrower may use the Form 3808EZ if the borrower meets one of the three qualifications listed below.  This 3-page form is relatively less complex to complete then Form 3508 (Long Form) because borrower does not need to compute the complex fulltime equivalent and salary/hourly wage reductions.   Contact your lender before completing the form as they may require additional documentations and supports.  The three qualifications are:
  1. Borrower is a self-employed individual, independent contractor, or sole proprietor with no employees at the time of the PPP loan application;
  2. Borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the covered period compared to the Q1 of 2020, AND the borrower did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the covered period; OR
  3. Borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the covered period compared to the Q1 of 2020, AND the borrower was unable to operate during the covered period at the same level of business activity due to compliance with requirements established or guidance issued by federal, state and local governments related to COVID-19.

• Form 3508 (Long Form): A borrower who is not eligible to use forms 3508S or 3508EZ is required to use the Form 3508.  This 11-page form requires computation of fulltime equivalent and salary/hourly wage reductions for each employee and require detail disclosures and supporting worksheet.  We recommend that borrowers who are required to use this form set aside adequate resources or seek for professional assistance and commence the related work early to timely submission for application.

2020 YEAR-END TAX PLANNING FOR BUSINESSES

As we are approaching the year-end, implementing strategic tax planning now is key to lowering tax liability that businesses will be soon paying.  Here are some key planning opportunities and considerations businesses should consider:

• GILTI & FDII– The 2017 tax reform introduced several international tax rules which may impact the international businesses. GILTI (Global-Intangible Low Tax Income) taxes U.S. shareholders of controlled foreign subsidiaries on income earned by the subsidiaries.  FDII (Foreign-Derived Intangible Income) provides a deduction for certain U.S. corporations with certain types of foreign source income.  Businesses should consult with their tax advisors to identify ways to minimize the tax impact of GILTI and consider the potential tax benefit of FDII.

Additionally, final relations were published in 2020 allowing a “high-tax exception” which may potentially exclude from GILTI income of a controlled foreign corporation that incurs a foreign tax at a rate greater than 90% of the US corporate rate, currently 18.9%.

• 199A Deduction – The section 199A deduction, otherwise known as Qualifying Business Income Deduction, may reduce business income of individuals, including pass-through income, up to 20%. The rule provides complex qualification criteria and limitations, and documentation requirement in the case of pass-through income.  The IRS issued Revenue Procedure 2019-38 that provides a safe harbor allowing certain interests in rental real estate, including interests in mixed-use property, to be treated as a trade or business for purposes of the qualified business income deduction under section 199A. Therefore, we recommend that the individual taxpayers with business and pass-through income should consult with their tax advisor before the year end to do planning in advance.

• Interest Deduction Limitation – Section 163(j) imposes a significant limitation on ability to deduct business interest. In nutshell, the section 163(j) limits interest deduction to 30% of business taxable income before interest deduction, depreciation, amortization and taxes.  Highly debt-financed businesses may be subject to substantial limitation if a proper planning is not done in a timely manner.

Please note that the CARES Act increased interest deduction limit of 30% to 50% for 2020.

• Bonus Depreciation- Expanded bonus depreciation rules allow taxpayers full expensing of both new and used qualifying property placed in service before 2023, creating significant incentives for making new investments in depreciable tangible property and computer software.  Bonus depreciation allowances increased from 50 to 100 percent for qualified property acquired and placed in service after September 27, 2017, and before 2023 (January 1, 2024, for longer production period property and certain aircraft). Plan purchases of eligible property to assure maximum use of this annual asset expense election and bonus depreciation, as the 100-percent bonus depreciation deduction ends after 2023.

Please note that the CARES Act redefined qualified improvement property (QIP) as improvements placed in service in 2018 and after and is 15-year property, such cost is eligible for 100% bonus depreciation.

• Excess Business Loss Limitation - Non-corporate taxpayers are now subject to a new limitation on the deductibility of business losses from pass-through entities (such as partnership, S-corporation and sole-proprietorship).  A taxpayer’s loss from trade or business in total is now limited to $500,000 for joint filers (or $250,000 for single filer) for the tax years 2018 through 2026.  Disallowed excess business losses will be treated as net operating loss and carried forward. Year-end tax planning is crucial for individuals with business(es) expect to generate loss for the year.

• R&D Credit - R&D tax credit is not just for large technology, medical device or drug companies.  It also applies to manufacturers of all sizes.  If a company, in the manufacturing industry, recently introduced new or improved products or manufacturing lines, there may be a good chance that the company would be entitled to the benefit of R&D tax credit. Some of the R&D credit qualifying activities that relate to manufacturers include, but not limited to, designing and developing cost-effective and innovative operational processes; improving product performance and manufacturing processes; evaluating and determining the efficient flow of material; designing and evaluating process alternatives; developing process to meet regulatory requirements or to reduce labor costs; developing and implementing new or improved safety enhancements; increasing operating and economic efficiencies; designing tools, molds, certification testing, environmental testing and automated manufacturing processes and so on.

The benefit of the R&D tax credit could range from 14% to 20% of qualifying expenditures that could be used to offset the company’s tax liabilities.  In addition, many states have their own means of incentivizing in-state R&D activities.

• Inventory Revaluation - A taxpayer that has established a book Lower of Cost or Market (LCM) reserve to reduce the cost of inventory to the net realizable value could possibly use the book LCM reserve to write down the cost of subnormal goods or normal goods to the net realizable value for tax purposes if the goods have been offered for sale below cost within the requisite time frame. Accordingly, a taxpayer with a book LCM reserve that is not deducting the LCM reserve for tax purposes might consider changing its tax method of accounting to use the book LCM reserve to write down inventory from cost to net realizable value.

For taxpayers in retail business, generally for tax purposes, a taxpayer that determines actual inventory shrinkage by taking a physical inventory may deduct the shortage. Section 471(b) allows a taxpayer to deduct estimated inventory shrinkage for tax purposes when the taxpayer does not take a physical inventory at year end. For certain retailers, Rev. Proc. 98-29 provides a safe harbor method of estimating inventory shrinkage. Taxpayers may use another method of accounting for estimating inventory shrinkage if it is reasonable and clearly reflects income.

We advise taxpayers to do a comprehensive year-end tax planning, considering all opportunities and updates, to assess their impact and develop tax planning strategies in advance.

Determining the fair value of private company stock-option awards at grant date or upon a modification to an award is often costly and complex because its equity shares often are not actively traded and no market price is readily available.  When determining the grant-date fair value of those awards of a private company, a valuation technique such as an option-pricing model is typically used under the existing generally accepted accounting principles (GAAP).  The Private Company Council (PCC) received feedback that the current valuation method is complex and costly, and has therefore proposed on October 1, 2020 a practical expedient that would be effective prospectively for all stock-option awards granted or modified during fiscal years beginning on or after the effective date of the proposal.

Currently, nonpublic entities obtain separate external valuations to satisfy the requirements of both Topic 718 and IRC section 409A.  Under this proposed practical expedient, when adopted, a nonpublic entity is allowed to determine the current price input of equity-classified share-option awards issued to both employees and nonemployees using a valuation method performed in accordance with the regulations of the Internal Revenue Code section 409A.  Currently, nonpublic entities obtain separate external valuations to satisfy the requirements of both Topic 718 and IRC section 409A.

Click the link below to view the Proposed ASU (Topic 718)

https://www.fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176175058347&acceptedDisclaimer=true

10월 9일, 미국중소기업청(SBA)에서 $50,000미만의 PPP대출자들을 위한 상환감면신청서의 약식버전인 SBA Form 3508S와 이를 위한 안내문을 발표하였다. 또한 재무부에서 잠정최종규칙(interim final rule)을 발표함에 따라 $50,000미만의 PPP대출자들의 경우에는 정규직 감소 및 급여의 감소에 의한 상환감면 금액이 감소하지 않는다. 대출자들은 여전히 대출기관에 자료를 제출하고 사실관계에 대해서 확인을 해야 하지만 $50,000미만의 PPP대출자의 경우 상환감면 신청이 대폭 용이해 질 것으로 보인다.

자세한 내용은 다음의 링크에서 확인 할 수 있다:

• Form 3508S: https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S.pdf
• 3508S 안내문: https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S%20Instructions.pdf
• 잠정최종규칙: https://www.sba.gov/sites/default/files/2020-10/PPP%20-%20IFR%20--%20Additional%20Revisions%20to%20Loan%20Forgiveness%20and%20Loan%20Review%20Procedures%20Interim%20Final%20Rules.pdf

On October 9, 2020, the U.S. Small Business Administration (SBA) released the new application form (SBA Form 3508S) along with instructions. Recipients of PPP loans of $50,000 or less will be able to use the simplified application form. Also, as the Department of the Treasury released a new interim final rule, PPP borrowers of $50,000 or less are exempted from any reductions in forgiveness based on: (1) Reductions in full-time-equivalent (FTE) employees; and (2) Reductions in employee salary or wages. Although the borrowers will still need to make some certifications and provide documentations to the lender, the application process will be streamlined for PPP borrowers of $50,000 or less.

For details please see:

• Form 3508S: https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S.pdf
• Instructions for Form 3508S: https://www.sba.gov/sites/default/files/2020-10/PPP%20Loan%20Forgiveness%20Application%20Form%203508S%20Instructions.pdf
• Interim Final Rue: https://www.sba.gov/sites/default/files/2020-10/PPP%20-%20IFR%20--%20Additional%20Revisions%20to%20Loan%20Forgiveness%20and%20Loan%20Review%20Procedures%20Interim%20Final%20Rules.pdf

보너스 감가 상각 관련 최종 규정

IRS에서 보너스 감가 상각 관련 추가 지침을 제공하는 최종 규정 (Final Regulation) 을 발표했다. 주목할 부분은 보너스 감가 상각이 가능한 적격개선자산 (QIP or Qualified Improvement Property) 의 정의 이다.

CARES 법안이 제정되기 전까지는 2017 년 12 월 31 일 이후에 준공된 QIP는 39 년에 걸쳐 감가 상각되었으며 해당 QIP는 즉시 공제 (immediate deduction) 대상이 되지 못하였다. 하지만 CARES 법이 제정됨으로 QIP의 내용연수 기간은 39 년에서 15 년으로 소급 변경되며 이에 따라 QIP는 2026 년까지 보너스 감가 상각을 받을수 있게 되었다.

최종 규정은 QIP 를 납세자가 건물 내부를 개선하는것으로 정의한다. 납세자가 개선을 한다는것은 직접 제작, 제조, 시공 또는 생산하는 경우 만이 아닌 제 3자가 계약을 통해 납세자를 위한 개선을 수행할경우도 마찬가지로 납세자가 개선한걸로 간주된다. 그러나 건물의 확장, 엘리베이터, 에스컬레이터 또는 건물의 내부 구조 프레임워크의 개선은 보너스 감가 상각 대상이 아니다.

COVID 로 인해 힘든 상황인만큼 이 규정은 납세자들의 현금관리에 유용할 것으로 보인다.

Final Regulations on Bonus Depreciation

The IRS issued final regulations providing additional guidance on bonus depreciation under IRC section 168(k).  One of the notable guidance included in the regulations relates to the definition of qualified improvement property (QIP) eligible for the bonus depreciation.

Before the enactment of the CARES Act, QIP placed in service after December 31, 2017 was depreciated over 39 years and the property was not eligible for an immediate deduction.  However, the CARES Act retroactively changed the recovery period for QIP from 39 to 15 years, which made QIP eligible for bonus depreciation through 2026.

The regulations define QIP as any improvement to a building’s interior that are made by the taxpayer. An improvement is made by the taxpayer if the taxpayer makes, manufactures, constructs, or produces the improvement for itself or if the improvement is made, manufactured, constructed, or produced for the taxpayer by another person under a written contact.  However, improvements do not qualify for bonus depreciation if they are attributable to the enlargement of the buildings, any elevator or escalator or the internal structural framework of the building.

The regulations provide a helpful tool to manage cash tax obligations for many of the taxpayers struggling to survive through the Pandemic.

고액자산가를 대상으로 한 새 부유세 법안 California Assembly Bill 2088” 발의

Assembly Bill 2088 법안이 통과될 경우, 개인이 소유하고 있는 자산이 부부합산신고의 경우 $30,000,000, 부부개별신고를 하는 경우 $15,000,00을 초과하는 납세자에게 0.4%의 세금을 부과한다. 이 법안은 거주자, part-year 거주자 및 임시 거주자에게 적용되며, 현재 캘리포니아 거주자가 아닐지라도 지난 10년을 기준기간으로 설정하여 과거 10년 중 부유세에 해당하는 경우 과세를 하게 된다.

10년 기준기간 조항

부유세 대상이 되는 납세자의 순자산은 지난 10년중 캘리포니아에 거주한 연수를 10년으로 나눈 비율을 사용하여 계산된다. 즉, 이전에 부유세 대상자였지만 캘리포니아 밖으로 이주하여 비거주자가 된 납세자의 경우, 납세자가 비거주자였던 연수에 따라 세금이 감소한다.

Part-year 거주자 및 임시 거주자

1년 중 60일 이상 캘리포니아에 거주한 사람은 임시 거주자로 정의되며 Part-year 거주자 및 임시 거주자의 경우, 세금은 캘리포니아 주에 거주한 일수에 비례하여 적용한다.

과세 대상 순자산에는 다음이 포함된다:

• 상장 및 비상장기업 (C-corporation) 주식
• S-corporation 주식
• 파트너십 및 사모펀드 지분
• 주식회사가 아닌 사업의 지분
• 채권 및 이자부 저축 계좌
• 현금 및 예금
• 농장 자산
• 뮤추얼 펀드 및 인덱스 펀드
• 해약 특권부 거래
• 채무증권
• 부동산 간접지분

평가 방법

시장 가치를 쉽게 구할 수 있는 자산의 경우, 시장가치로 세금 부과 대상이 되는 순자산이 평가된다. 시장 가치를 쉽게 구할 수 없는 자산의 경우 평가 방법을 명확히 하는 규정을 Franchise Tax Board가 채택할 것으로 보인다.

벌금

법안은 $1,000,000 또는 세금의 20%를 초과하는 미달 지급에 대해 20%의 벌금을 부과한다.

이 법안의 제정을 위해서는 3분의 2의 득표가 필요하기 때문에 이 법안의 통과는 공화당 의회의 많은 반발에 직면 할 것으로 예상된다. 고액순자산보유자는 입법 업데이트를 검토해야하겠다.

California Assembly Bill 2088 proposes a new Wealth Tax on High Net Worth Individuals

Assembly Bill 2088 (the “Bill”) would impose a 0.4% tax on residents with a worldwide net worth in excess of $30,000,000 ($15,000,000 for a married taxpayer filing separately).  The proposed tax, if enacted, would apply to residents, part-year residents, and temporary residents.  The proposed tax also applies a 10-year lookback period in taxing former residents who had been subject to the wealth tax in any of the preceding 10 years.

10-year lookback provision

The portion of a taxpayer’s wealth subject to the wealth tax is multiplied by a fraction, the numerator of which shall be years in residence in California over the 10 preceding years with 10 years being the denominator.  For taxpayers who have previously been subject to the wealth tax in one of the preceding 10 years but left the state and became a nonresident, the tax would decrease based on the number of years the taxpayer has been a nonresident.

Part-Year and Temporary Resident

Temporary residents are defined as those who stay in the state more than 60 days during the calendar year.  For part-year and temporary residents, the tax would apply proportionally based on the number of days they are in the state during the year.

Net Worth subject to Wealth Tax

Assets subject to the tax under the Bill includes, but not limited to:

• Stock in publicly and privately traded C-corporation
• Stock in S-corporation
• Interests in partnership and private equity funds
• Interest in noncorporate businesses
• Bonds and interest-bearing savings accounts
• Cash and deposits
• Farm assets
• Mutual funds and Index funds
• Puts and calls
• Debt securities
• Indirect interest in real property

Valuation Method

Assets with readily available market value will be used to determine the net worth subject to the tax.  For those assets without readily available market value, the Franchise Tax Board will adopt regulations that would clarify valuation methods.

Penalties

The Bill imposes 20% penalty for underpayments exceeding $1,000,000 or 20% of the tax due.

Take-away

It is anticipated that the passage of this Bill will face lot of challenges and push-back from Republican Assembly, as it requires two-thirds of votes for enactment.  However, high net worth individuals with connections in the state should monitor the legislative updates.