CPAs Urge Lawmakers to Extend PPP Loan Application Deadline

CPAs' Concerns

Simpson told the lawmakers that along with challenges related to "front-end compliance checks" for new PPP loan applications when the program reopened in 2021, CPAs are also assisting clients with figuring out "the interplay between PPP and the Employee Retention Credit (ERC) to ensure compliance with both programs."

Compounding that complexity, Simpson continued, "is that recent IRS guidance on March 1 for employers claiming the ERC for 2020 was issued after the filing deadline for 2020 payroll tax returns."

The result: "CPAs immediately realized that many borrowers will now need to file amended payroll tax returns to access the business relief afforded to them by the ERC," Simpson said.

Many CPAs "now must be learning about new IRS ERC guidance, adapting to changes in PPP guidance, assisting clients with the operational challenges of applying for PPP and working in another COVID-impacted tax season," she said.

Simpson relayed to ThinkAdvisor Wednesday in a separate email that she "recently heard from a CPA who said that lawmakers need to understand that each PPP loan has a real person and real story behind it — and I couldn't agree more. " This " puts a fine point on why the PPP application deadline should be extended by at least 60 days."

The CPA's "words also reinforce the great need to make the recent changes in loan amounts for IRS Form Schedule C filers retroactive to create equity among self-employed PPP draw borrowers regardless of when they applied for a PPP loan," Simpson said.

Biden's PPP Loan Limits Boosted Female, Minority Business Owners

The Biden-Harris administration announced in mid-February that from Feb. 24 to March 9 only businesses with fewer than 20 employees could apply for a PPP loan.

President Joe Biden said that the PPP application restrictions, which lasted for 14 days, were intended to aid the smallest businesses and "those that have been left behind in previous relief efforts."

Ninety-eight percent of small businesses have fewer than 20 employees.

The SBA reported that as of March 7, a comparison of the daily average rate of loans made during the exclusivity period and daily average rate 10 days before the exclusivity period show loans to:

Minority-owned businesses up by 20%, or an additional 1,000 businesses accessing relief each day;
Women-owned businesses up by 14%, or an additional 600 businesses accessing relief each day;
Small businesses in rural areas up by 12%, an additional 1,000 businesses accessing relief each day.

"In total, more than 400,000 small businesses and nonprofits with fewer than 20 employees were serviced during the exclusivity period as of March 7," the SBA reported. "Compared to the ten days preceding the exclusivity period, the reforms show that nearly 200,000 are first-time PPP borrowers — a 25% increase in daily approvals."