PPP Loan Part 2

We already covered in Part 1 highlights of the PPP loan changes such as loan forgiveness issues, and another round of PPP loan funds available, also called the PPP2 loan program. In this posting we will cover other topics that were also included in this legislation.  Please note this is not a comprehensive list, and we may offer other updates at a later date.

  • Extension of unemployment benefits as a $300 per week supplement (effectively extending the prior unemployment benefits offered through March 14, 2021).
  • Increases deductible meals deduction to 100% (from 50%) for ordinary and necessary business meals that are purchased from a restaurant.
  • Simplifies PPP loan forgiveness application for loans of $150,000 or less. 
  • Eliminates the requirement that PPP loan borrowers deduct the EIDL advance amount from their PPP forgiveness amount.

We help many other individuals and businesses with tax reporting, general tax compliance and advice. If you do not feel comfortable taking care of these filings, reach out to us at [email protected]apstonecpagroup.com.

Anthony Momany, Managing Member, Capstone CPA Group PLLC

Filing reminder: 1099-MISC and 1099- NEC

As I already mentioned in my posting called form 1099-NEC, the federal government has created a new form, please check out my blog post for more information about this form and the new way to report contractor payments. This form was created specifically to report payments made for Non-Employee Compensation (hence 1099-NEC) also called subcontractor payments.

Form 1099-NEC

  • Reports Non-Employee Compensation, also called contractor payments or subcontractor payments.
  • Due on or before January 31st.
  • For contractor payments of $600 or more (generally, see prior blog post for more information).
  • Penalty for late or non-filing may be as high as $100 per missing or late form filed per year required
  • Please also note there may be additional penalties for not providing forms to contractors.

Form 1099- MISC

  • Form 1099- MISC reports other business payments made to outside vendors, examples include payments made for:
    • Rents paid, prizes and awards, other income payments, fishing boat proceeds, medical and health care payments, crop insurance proceeds, payments to an attorney, there are also a couple of other payments that may qualify, so this is not an exhaustive list
    • You no longer use this form for non-employee compensation you use the new form 1099-NEC form for contractor payments.
  • Due on or before February 28th (for this year only).
  • For vendor payments generally above $600 or more annually, however some limitations and special rules may apply
  • Penalty for late or non-filing may be as high as $100 per missing or late form filed per year required
  • Please also note there may be additional penalties for not providing forms to vendors.


We help many other individuals and businesses with tax reporting, general tax compliance and advice. If you do not feel comfortable taking care of these filings, reach out to us at [email protected]

Anthony Momany, Managing Member, Capstone CPA Group PLLC

PPP Loans- Part 1

As changed in the recent legislation, PPP loan funds received in 2020 under the PPP program will likely be treated “from a tax standpoint, as though they were never received”. We are still awaiting technical guidance from the IRS to comply with any reporting requirements, and we believe there still may be some technical issues that will affect business tax reporting for PPP loan funds received in 2020. However, we are hopeful that this will effectively eliminate the dispute between Congress and the IRS as to whether PPP loan funds, once forgiven, should be treated as income or an impairment of an expense on your business tax return for 2020 or 2021.

This bill also may provide your business with much needed funding in the form of another round of PPP loan money available (calling this program PPP2). Under the PPP2 program your business may be eligible for a potentially forgivable loan under the following circumstances:

1.       Your business did not receive PPP loan funds last year OR

2.       Your business did already receive PPP funds AND has all the following characteristics:

a.        Have fewer than 300 employees

b.       Have used or will use the full amount of the PPP loan (per forgiveness testing)

c.       Can show a 25% gross revenue decline in any quarter comparing 2020 to 2019.

We help many other individuals and businesses with tax reporting, general tax compliance and advice. If you do not feel comfortable taking care of these filings, reach out to us at [email protected]

Anthony Momany, Managing Member, Capstone CPA Group PLLC

New 1099 form – 1099-NEC

Unless you are certified tax nerds like us you may have missed a new and (not so) exciting change to the world of 1099 filing. The federal government has created a new form, called form 1099- NEC. This form was created specifically to report payments made for Non-Employee Compensation (hence 1099-NEC).

What is NEC?

  • Payments for compensation, commissions, fees, prizes and awards for services performed. Commonly known as payments to subcontractors or contractor payments.
    • Reimbursements or payments for goods does not count for these tests
  • The payments must be $600 or more for an annual period, not including amounts not considered (see above).
  • Paid by a business (individuals are not required to issue a 1099’s in most cases)
  • The individual or business receiving the 1099 has not already been paid as an employee for these payments
  • The business whom would receive the 1099 is not incorporated. Corporations and S Corporations do not need to receive 1099’s annually.

You will notice, however that there is still something called a 1099-MISC form. On the 1099-MISC form you would report other payments as per prior filing requirements, just not for form 1099-NEC recipients.


We help many other individuals and businesses with tax reporting, general tax compliance and advice. If you do not feel comfortable taking care of these filings, reach out to us at [email protected]

Anthony Momany, Managing Member, Capstone CPA Group PLLC