Detailed analysis of the SBA’s loan forgiveness provisions including:
- The treatment of partners, self-employed individuals, and S corporation owners,
- Determining FTEs,
- Avoiding reduction in forgiveness amount because of a reduction in FTEs or a decrease in an employee’s compensation, including new safe harbors for avoiding these reductions,
- Choosing an alternative 8-week period for determining loan forgiveness,
- The meaning of costs “paid and incurred” during the 8-week period,
- Determining costs qualifying for loan forgiveness including the determination of mortgage interest, rents, and utilities and the 25% limitation for these expenses.
Detailed coverage of the just-released SBA Interim Final Rules for PPP Loan Forgiveness, including guidance on:
- Loan forgiveness calculation for self-employed individuals, partners, and S corporation or C corporation shareholder/employees
- Whether bonuses or fringe benefits paid during 8-week testing period are included in qualified payroll costs
- How to treat furloughed worker who rejects a rehire offer
- Can we pre-pay rent and utilities during the 8-Week testing period
- Detailed discussion of the wage reduction and FTE reduction rules
- How to determine if qualified costs are paid or incurred during the 8-week testing period
Employee Retention Credit
There are many businesses that did not receive PPP loans or that repaid the loans by the SBA’s required deadline. Those businesses may qualify for the Employee Retention Credit (ERC). The ERC is equal to 50% of an employee’s qualifying wages up to a maximum $5,000 credit per employee. This credit may be claimed on an amended Form 941. Don will review the ERC provisions including key items covered in the more than 90 FAQs issued by the IRS.
Other Recent CARES Act Developments
The primary focus of this program is the PPP loan forgiveness provisions. However, time permitting, Don will review other recent CARES Act developments.
