PPP Loan Forgiveness FAQs for Borrowers and Lenders
Posted on August 7, 2020
By Scott Zickefoose, CPA, CM&AA, Transaction Advisory and Tax Senior Manager
Additional PPP Loan Forgiveness FAQs
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a $2.2 trillion stimulus package that provided relief to small businesses and individuals. The Paycheck Protection Program (PPP) allocated funding to small businesses through new and enhanced loan programs administered by the Small Business Administration (SBA).
The latest PPP loan forgiveness FAQs consist of 10 pages addressing more borrower and lender questions concerning the program.
“SBA and Treasury Release Additional Paycheck Protection Program FAQs” Excerpt:
“The SBA, in consultation with the Department of the Treasury, has been issuing periodic updates and changes on Frequently Asked Questions (FAQs) and Interim Final Rules. The latest FAQ consists of 10 pages which addresses more borrower and lender questions concerning the PPP. Below is a summary of the key changes worth noting.
Summary of Key Changes in PPP Guidance as of August 2020
- Forgiveness is not provided for expenses for group health insurance benefits accelerated from periods outside the Covered Period or Alternative Payroll Covered Period i.e., you can not prepay health insurance costs and include those costs in the borrower’s forgiveness application request.
- Forgiveness is not provided for employer contributions for retirement benefits accelerated from periods outside the Covered Period or Alternative Payroll Covered period…again, you can not prepay.
- If an owner-employee receives compensation from multiple companies, the owner-employee is limited to $15,385 or $20,833 across all companies (depending on the length of covered period chosen by the borrower(s)). However, the owner-employee/borrower may choose how their payroll is allocated i.e., if the owner compensation is not needed in one entity, but is in another, the borrower can allocate all of their compensation to the entity in need of more payroll costs.”
We know things are hectic but remember to lean on your advisors (counsel, accountant) for insights they have, as many of these decisions in normal times are made infrequently.
We are here to answer your questions on PPP loan forgiveness and assist in any way we can. We will be providing additional insights and updates as we move through this period of uncertainty.
Additional Resources:
Paycheck Protection Program Flexibility Act: What You Should Know
Paycheck Protection Program Re-Hire Offers and Rejections Clarified
PPP Guidance: Allowable Tax Deductions for Business Expenses
Required Documentation for PPP Loan Forgiveness
COVID-19 Timeline: Business Valuations and U.S. Stock Market Impact
Matt Austin Scott Zickefoose
Email: maustin@keiteradvisors.com Email: szickefoose@keitercpa.com
Phone: 804.433.4184 Phone: 804.273-6253
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