Accounting for PPP, EIDL and Other COVID-19 Relief Programs
The Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) were enacted to provide relief to individuals and organizations affected by the COVID-19 pandemic. While these programs have provided welcome relief, a challenge many businesses have encountered, is how to account for these relief programs in their accounting systems.
Each of the following relief programs have unique accounting challenges:
- Paycheck Protection Program (PPP)
- Economic Injury Disaster Loan (EIDL)
- Qualified sick leave wages employer payroll tax credit
- Qualified family leave wages employer tax credit
- Employee retention credit
- Payroll tax deferral
Solutions Beyond the Obvious
Tronconi Segarra & Associates LLP and our general ledger specialists are here to guide you through this unprecedented time and provide you with the most appropriate solutions for recording your transactions related to the COVID-19 relief programs. Our solutions will not only include assistance with appropriately recording these transactions, but will also include recommended best recordkeeping practices to efficiently monitor and track these items.
- Ensuring your accounting records accurately reflect that PPP loan proceeds are spent on eligible and forgivable expenses.
- Ensuring your accounting records reflect that EIDL advances and loan proceeds are used on eligible expenses that do not overlap with PPP expenses.
- Accurately record loan proceeds, advances and repayments.
- Detailed tracking of eligible payroll, health care costs and other expenses.
- Credits can be realized via an advance, a refund, or simply by reducing your Federal tax deposits.
- Finding the best way to track, monitor and record the credits and reductions in Federal tax payments.
- It’s imperative that the payroll tax liability and expenses be recorded and accrued timely and payment dates monitored.
- Developing and implementing a method to track and account for this liability in your accounting system so key submission dates are met and not missed.
Visit the COVID-19 Resource Center on our wesbite for more information about the Paycheck Protection Program, Economic Injury Diaster Loans (EIDL) and Advances, paid sick and family credits, the employee retention credit and the deferral of payroll taxes.
If you have any uncertainty about where or how to properly account for these programs in your accounting system, please do not hesitate to contact us to discuss your questions.
Contact our General Ledger Specialists
Tronconi Segarra & Associates accounting and general ledger specialists presented two webinars with guest speakers from ADP and Paychex, to share information on accounting for COVID-19 relief programs, including how to properly account for PPP and EIDL loan proceeds, eligible expenses and any loan forgiveness provided by the SBA in your accounting software.
This website has been prepared for general guidance on matters of interest only; it does not constitute professional advice. You should not act upon the information contained in this website without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy of completeness of the information contained in this publication; and, to the extent permitted by law, Tronconi Segarra & Associates LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this website or for any decision based on it.
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