Call Us 24/7


Send Us Mail


PPP loans, PPP Forgiveness, EIDL, Tax Credits and More

Good Morning my Concierge Family,

I hope everyone is doing well and is safe and healthy. Most businesses and business owners are finally starting to reopen and see some relief in the form of PPP, EIDL funds and resuming operations. This has provided some much needed assistance and assurance to many struggling businesses and business owners. So the first hurdle is done, businesses have received some money and assistance. Now the next hurdle applies.

PPP Funds

For those of you who have received PPP funds, impeccable record keeping is a must. Hopefully, these funds have been designated into a separate bank account for ease of record keeping.

The AICPA is still working with the SBA and treasury to get pressing issues resolved on many open issues pertaining to forgiveness such as the 8-week coverage period, companies not being open long enough to spend the funds, and which expenses apply. Remember if you breach this, or any part is not forgiven, it becomes a two year loan with a 1% interest rate. Here is a quick recap of ways you can spend your PPP funds:

Payroll costs including:

  • Salary, wages, commissions or similar
  • Cash tips or the equivalent
  • Payment for leave
  • Allowance for separation or dismissal
  • Housing allowance or stipend
  • Payments for group health care benefits, including group health care coverage
  • Payment of any retirement benefits
  • Payment of state and local taxes assessed on the compensation of employees

A few things on the payroll costs:

  • 75% of eligible costs are to be used for payroll. If you spend less than 75%, the forgiveness is reduced.
  • Only the equivalent of the first $100K, per person, in annualized payroll costs, can be counted (cannot exceed $15,385).
  • This DOES NOT include payments to independent contractors.

Mortgage interest on real or personal property (owned by the business) or rent under a leasing agreement for agreements in effect prior to 2/15/2020.

Utilities, which includes payment for expenses such as electricity, gas, water, transportation, telephone, or internet access. Service must have been established prior to 2/15/2020. Just around the corner, in July and August, businesses are going to want to start applying with their banks for PPP loan forgiveness. There is a two-page application for forgiveness, see link below, that businesses will submit to their lender, which includes a Schedule A along with a Worksheet for Schedule A, and each Schedule/Worksheet has a set of instructions.  We are familiar with these forms and will be here to assist and help with these confusing and cumbersome forms, required documentation, and instructions.  This will be a fun summer project for everyone.

Our last hurdle will be the tax return presentation for the funds and expenses.  This is a huge discussion with my profession.  If the income is forgiven than the expenses cannot be deducted on your 2020 tax return.  That means all expenses paid with these funds will need to be isolated and removed from expense accounts as to not improperly report and overstate expenses on your tax returns.


For those of you who received EIDL loans, be extremely careful and follow your loan covenants, conditions and regulations. Although it is not a condition, these funds should be placed into a separate bank account.

I have dissected each of the loan covenants in these agreements and I hope people read these very carefully before signing and receiving the funds. Here is a synopsis of these loan covenants:

  • These funds are to be used for working capital so keep an extremely detailed record of every expense including invoices if you pay with EIDL funds
  • This is a loan with a 3.75% interest rate
  • Payments are deferred for one year from the date of your initial disbursement
  • The borrower must retain and itemize all expenses associated with these funds and documentation must be kept for a minimum of seven years.
  • The SBA requires books and records to be kept for the entire loan period.  If you have a 30-year loan, you better have a good accounting system to track these funds and expenses for the duration of the loan. 
  • You cannot use the funds to relocate your business and you must request prior approval before moving your business by the SBA
  • The borrower should purchase only American made equipment with proceeds of this loan
  • You must have a hazard insurance policy to protect these funds
  • The SBA can come in at any point in time and audit your books and records. They can also ask for copies of any business documents at any point in time.
  • Within three months of your year-end, you are to provide the SBA with year-end financials.  These will need to be “reviewed or audited financials.”  These are not computer-generated financial statements.  These are attestation engagements that must be performed by a certified public accountant at the borrower’s expense.  These engagements take a lot of time  (minimum of six weeks) so if you have this requirement let us know so we can get you an engagement letter, discuss the scope and quote a fee for these services.  And, if you are usually on extension, you are going to need your books, records, and this engagement is done in the 1st quarter of the year.
  • There are limitations on the distributions of assets in ways of distributions, gifts, loans, etc. You can’t give yourself a big bonus
  • If you violate any of these conditions, the loan will be in default and be due immediately.  If it cannot be paid back they will cease assets.  Civil and criminal penalties can also apply for wrongfully misapplying the proceeds.
  • For loans of $25,000 or more, the SBA has collateral agreements and have rights to your:
    • Bank accounts
    • Trade receivables
    • Credit card receivables
    • Insurance receivables
    • Inventory
    • Fixed assets
    • Letter of credit rights
    • Intangibles
    • Software
    • The borrower cannot sell, lease or transfer any assets without permission from the SBA
    • Changes to your business legal structure of the place of business required preapproval from the SBA

Based on these items, I hope borrowers read through all of these items very carefully before signing and receiving funds. 

Employee Retention credit The Employee Retention Tax Credit (ERTC) is one of many relief provisions included in the CARES Act to encourage small businesses to keep employees on staff instead of furloughing or laying them off. The credit is equal to 50% of qualified wages paid to an employee between March 12, 2020, and Jan. 1, 2021, including qualified health plan expenses. The maximum amount of qualified wages that can be claimed is $10,000, which means the maximum credit for anyone employee is $5,000.

There are two ways to qualify for the ERTC as an eligible employer. According to the IRS website, you either need to:

  • Fully or partially suspend operations at any point during 2020 due to a coronavirus government mandate.
  • Show a significant decline in gross receipts during a calendar quarter in 2020. To qualify under this requirement, gross receipts of any given quarter must be less than 50% of the gross receipts of the same quarter in 2019.

This refundable tax credit is reported on Form 941, Employers QUARTERLY Federal Tax Return. That means no applications, no fees, and no waiting. It does, however, have some rules – after all, this is tax.

The credit is calculated each calendar quarter for wages paid after March 12, 2020, and before January 1, 2021. That means the ERTC is generally available for quarters 2, 3, and 4 for the 2020 year (and part of quarter 1).

If you can take advantage of this credit we can assist with the 941 Forms and have relationships with Payroll companies that can help with your payroll needs and these credits.  I hope this information was helpful.  As always, we are here for you and are walking this journey with you.  If you have questions, comments, or concerns we are only an email, phone call, or text away.  Remember, we are all in this together and will get out of this together. 

Please call or email us for more information and questions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Jocelyn Sihathep (Jo1)

Office Manager

We have a Sun Devil in the house! We are honored to add to our team, Jo. She is a graduate of Arizona State University (Fear the Fork) and is looking to broaden her knowledge and understanding of business and accounting.

She is the engine of our fine-tuned machine. Her “can do” attitude, commitment to customer service and outstanding organization skills allows us to focus on what matters most, our clients. She is amazing with technology and strives for excellence. She embraces the entrepreneurial spirit and is a great asset to our team.

Jocelyn Weatherley (Jo2)


Jo was previously an accountant for a $60M company and their 13 subsidiaries. She is in charge of our accounting and bookkeeping department and serves our clients on their time schedule. Whether it is weekly, monthly or quarterly she helps provide reliable, useful and accurate information to our clients on their terms.

Jo performs full accrual accounting and is responsible for reconciling all accounts, journal entries, month end closing procedures and preparation of internal financial statements and analytics. She also assists in the preparation of sales and payroll tax returns. She holds a wide range of knowledge, from QuickBooks to travel (she spent most of her life in the UK), she’s your girl. She is excited to join the CCA team and ready to conquer tax season head on!

Dixie Cary

CPA and Tax Manager

Dixie is a Minnesota CPA and experienced accountant. She has over 25 years of accounting in both audit and tax, but her passion is tax. After years in the cold, she decided to leave the mid west and find a new home in Sunny Arizona. We are so happy that Dixie has joined our team.

Dixie leads and manages our entire tax department. She assists and leads a team through our busiest times while delivering quality, complete and accurate tax services for our clients. She is proficient in preparation, planning, and education of federal and state income taxes for individuals, businesses, estates, trusts, and exempt organizations.

Theresa Elaine Valade

CPA and Managing Partner
Theresa has over 27 years of experience in tax, audit and consulting. She was with the International CPA Firm of Arthur Anderson in Phoenix and San Francisco. She most recently was a partner with Moffitt & Company, P.C. Her areas of specialization are business consulting and advisory, audits, income tax planning and preparation, and IRS audit representation. Her industries of specialization are nonprofits, real estate, hospitality, franchises, mortgage banking and brokering, title insurance, escrow, health, and beauty.
One of Theresa’s biggest honors is being named the 2020 CPA firm of the year for her commitment and service to her clients during the challenges imposed by the COVID-19 pandemic. Putting passion and personalization at the forefront Theresa has led her firm to excellence by not only providing measurable results for clients but making them feel well taken care of during times of great uncertainty.
Theresa is also a member of the prestigious, Arizona Society of CPAs, ASCPA, 100% Membership Club. It is an honor to be part of this club that exhibit’s a high level of commitment to the Arizona Society of CPAs. We are privileged to be able to convey to our clients, staff, and colleagues of Theresa’s significant commitment to the CPA profession.