FTB confirms they will follow new PPP guidance - Spidell

FTB confirms they will follow new PPP guidance


The FTB has confirmed that they will follow the new interim final rule issued by the SBA allowing second-draw PPP loan borrowers to use a COVID-19 Revenue Reduction Score to prove they meet the 25% gross receipts reduction test. Under AB 80, California taxpayers must prove that they meet this test to take deductions for amounts paid with forgiven PPP debt on their California returns.

The new COVID-19 Revenue Reduction Score uses a variety of data inputs including industry, geography, and business size. The scores will be accessed through the SBA. Lenders who are processing applications will have access to this data, as will borrowers who are applying directly with the SBA for loan forgiveness. At this point, there is no separate website to access scores or information on the scores.

For more information on AB 80 and the FTB’s conformity to federal guidelines on the gross receipts test, go to:

www.ftb.ca.gov/about-ftb/newsroom/covid-19/faqs-for-paycheck-protection-program.html

To view the new interim final rule from the SBA, go to:

www.sba.gov/sites/default/files/2021-07/FINAL%20IFR%20Forgiveness%207.23.21-508.pdf

Attend Spidell’s Critical California Tax Issues webinar and get information on filing California returns for PPP borrowers and other important issues. Click here for details.