The landmark CARES Act, signed into law by the President on March 27, provides many employers with several options to increase liquidity and cash flow during the time of the COVID-19 pandemic. And only 9 days before that legislation was enacted, the Families First Coronavirus Response Act (FFCRA) also created two other payroll tax-related incentives for certain employers, and to self-employed individuals.
The incentive receiving the most attention, both here in Alabama and across the country, has been the Paycheck Protection Program (PPP) administered by the SBA in cooperation with private banks. As our friend Tom Zoebelein points out in his thorough article beginning on page 9, these loans can become (federally) tax-free grants if the borrower expends a certain percentage of the loan funds on qualifying expenses, particularly payroll, maintains good documentation, and then applies for and receives written forgiveness from the lending bank.
The complete article, "CPAs Beware: Some CARES Act and FFCRA Incentives Don't Play Well Together," was published in the May–June 2020 issue of the Alabama Society of CPAs' magazine Connections. The full version of the article can be found here.