How To Track the Use of PPP Loans?

It’s a fact that you have to track the use of the PPP loan funds, especially if you want to apply for forgiveness. In addition, the PPP loan use payments are not deductible so the usual way of recording these types of payments in your bookkeeping program does not apply.

Before getting right into it, here is some background info about the use of PPP loan proceeds.

There are two types of PPP loan Allowable Uses – Forgivable and non forgivable.

  • Forgivable Uses:
    1. Payroll costs:
      • Salaries and wages for those earning less than 100K (per annum). Wages do not include:
        • Wages paid to employees who live outside the US or
        • Wages paid that qualify for other credits like sick leave wages covered under the Phase 1 Coronavirus relief.
      • Group health insurance premiums
      • Employee retirement contributions (i.e. safe harbor match)
      • Owner compensation up to 100K (per annum)
      • State taxes imposed on compensation like employer portion of NJ SUI & SDI
    2. Mortgage Interest (no principal) on real or personal property debt incurred before 2/15/2020.
    3. Real and Personal Property rent and lease payments under leases in force before 2/15/2020.
    4. Utility payments including electric, gas, water, fuel for auto, telephone and internet access for service that began before 2/15/2020.
  • Non Forgivable Uses
    • Non Mortgage Interest and mortgage interest for debt incurred after 2/15/2020
    • Rent or lease payments on leases in force after 2/15/2020
    • Utility payments mentioned above for service that began after 2/15/2020

RE – prepaying above items – The rules only specify that prepaid interest is not allowed – thus, other prepayments seem to be allowed and should be considered if falling short of using the PPP funds for allowable uses.

RE – Separate Checking account – it is recommended to use a separate checking account, but not required, especially if you use a tracking system like the one that follows.

Here is one way to track the PPP loan activity using QuickBooks Online, however, the method can be adapted to any General Ledger Accounting Program.

  1. Add the following “Other Current Liabilities Type” accounts and sub accounts to your Chart of Accounts.COA - first
  2. Record the amount received from your PPP loan to “PPP Loan Payable”COA - second
  3. Record payments made with the PPP funds to the appropriate sub account of PPP Loan Payable.COA - Third

NOTE – Notice the Forgivable uses account name is noted as Potential. This is because certain requirements exist to allow for 100% of these types of uses – consult with your advisor for more details on forgiveness limitations.


Related Sources and Links:

. IRS Coronavirus Page
. Small Business Administration Covid-19 Guidance and Loan Resources
. The U.S. Chamber’s Small Business Loan Guide & Checklist




This is general information and should not be relied upon to make business or tax decisions. Instead, please use the above information as a resource to help discuss your business and financial picture with your professional advisers.


(c) 2020 Simoncpa, PC

$2 Trillion Stimulus Package Includes $350 Billion to Help Small Businesses During the Covid-19 Pandemic

On March 27. 2020, The President signed The Coronavirus Aid Relief and Economic Security ACT (CARES) into law, a massive $2 Trillion US Government Stimulus Package.

The main purpose of the package is to provide cash to Americans, Businesses, States, Cities, and Health Care Facilities. The measure includes the Paycheck Protection Program Initiative to help small businesses keep workers employed amid the pandemic and economic downturn with 100% federally guaranteed, potentially forgivable, loans.

Continue reading “$2 Trillion Stimulus Package Includes $350 Billion to Help Small Businesses During the Covid-19 Pandemic”

New Sick Time Laws Passed at the Onset of the Covid-19 Pandemic

On 3/18/2020 the President signed the Families First Coronavirus Response Act (FFCRA).

FFCRA will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will ensure that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus while at the same time reimbursing businesses.

Continue reading “New Sick Time Laws Passed at the Onset of the Covid-19 Pandemic”

State Income Tax Due Dates Are Delayed Because of the Covid-19 Pandemic

Pretty much every state has delayed the income tax filing deadline.

But first, a thank you to the New Jersey Society of CPAs (NJSCPA) and the American Institute of CPAs (AICPA) for tracking this information and keeping on the governors and legislatures to let us know what the due dates officially are.

Continue reading “State Income Tax Due Dates Are Delayed Because of the Covid-19 Pandemic”

IRS Provides Other Relief During the Covid-19 Pandemic

The IRS just released IRS News Release IR-2020-59 to unveil the People First Initiative.

It provides relief on a variety of issues ranging from easing payment guidelines to postponing compliance actions.

Continue reading “IRS Provides Other Relief During the Covid-19 Pandemic”

IRS Delays Income Tax Due Date Because of the Covid-19 Pandemic

According to IRS News Release IR-2020-58, Tax Day is now July 15th.

This new deadline applies to filing and payment of all income taxes owed on or before 4/15/2020 by all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Continue reading “IRS Delays Income Tax Due Date Because of the Covid-19 Pandemic”

How to Clear Web Browsing Data When You Exit Chrome?

This is a tough setting to set, not because of how to set it, but because it makes you sign into all sites over and over again when you visit them. It sounds bad, but it is good as it helps protect your financial data!

Here’s a How To Cast on how to clear browsing data and set chrome to clear data when you exit Chrome.

Continue reading “How to Clear Web Browsing Data When You Exit Chrome?”

Required Minimum Distributions (RMDs)

Brutally put, RMD’s is the IRS’s way of saying  you cannot keep retirement funds in your non-taxable accounts until death.

You must start taking the money back out, and be taxed on it, a certain number of years before you die. The rules have been around for quite some time, but some new rules have kicked off in 2020. Some of the changes are:

Continue reading “Required Minimum Distributions (RMDs)”

Reasons to Dissolve, Cancel or Withdraw a New Jersey Business Entity

It’s a fact. Business entities ceasing to do business in New Jersey must take steps to “officially” end the business.

The big question is, do you really have to do it? Why not…., not pay the $50 annual fee and let NJ put your entity in revoked status? Here’s why not:

Continue reading “Reasons to Dissolve, Cancel or Withdraw a New Jersey Business Entity”