Michael “Mike” Carraway, a CPA and partner with GranthamPoole CPAs spoke to the Rotary Club of North Jackson about the 2020 Cares Act (the Act) at the club’s November 24, 2020 meeting. Carraway is a Summa Cum Laude Graduate of the University of Mississippi with Bachelor’s and Master’s degrees in Accountancy. He focused his talk on the Payroll Protection Program (PPP) authorized by that Act. Per Carraway, the Act initially authorized the issuance of $349 billion in PPP loans to small and businesses with 500 or fewer employees. The authorization was subsequently increased. He said that as of April 15, 1.7 million loans were made and that as of August 8, 5.2 million loans were made totaling $525 Billion. Currently, the authorization is $659 billion with some of the funds unallocated. If certain rules are followed, the loans are interest-free and do not need to be repaid.
The purpose of the PPP was and is to keep people employed and to keep money in the financial system. He gave the example of a client who said that he had told his receptionist to stay at home. The client asked if he could continue paying the receptionist with PPP funds. Carraway responded affirmatively saying that paying the receptionist was consistent with the spirit and rules of the PPP.
Carraway further elaborated that Congress still has work to do with PPP since forgiving a loan creates income under existing tax law. For that reason, Congress needs to fix the legislation so that forgiven PPP loans do not create income. That still has to happen.
We thank Carraway for his presentation and for his service to the businesses of Mississippi. The complete meeting including his presentation can be viewed by clicking on the following link https://vimeo.com/483931050.