Certain payroll costs are specifically excluded from the PPP, including compensation of an individual employee in excess of an annual salary of $100,000, foreign employees, and FICA and income tax withholdings.
Jun 19, 2020 · Compensation Caps – Employees. The compensation included in the forgiveness amount for any employee may not exceed $15,385 per individual, if a borrower has elected an 8-week covered period. If a borrower has elected a 24-week covered period, the forgiveness amount may not exceed $46,154 per individual. Payroll Costs Forgiveness Requirement.
May 18, 2020 · Eligible nonpayroll costs must be (i) paid during the Covered Period (NOT the Alternative Payroll Covered Period) or (ii) incurred during the Covered Period (NOT the Alternative Payroll Covered Period) and paid on or before the next regular billing date, even if the billing date is after the Covered Period.
This loan will remain a payable until either the bank provides a notice of forgiveness or principal payments are made. This is an important consideration, as simply paying forgivable expenditures does not affect the loan balance. PPP loan forgiveness GAAP guidance
Apr 30, 2020 · April 30, 2020. Loan forgiveness is a key feature of the Paycheck Protection Program (PPP) administered by the Small Business Administration (SBA) pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). If PPP loan proceeds are spent in accordance with the loan forgiveness rules and guidelines, all or a substantial portion of the loan amount may be forgiven, effectively transforming PPP loans into grants.
However, to qualify for PPP loan forgiveness, you will still have to spend 75% of your loan on payroll expenses, which include employee compensation, taxes, and benefits. So, you will likely need to hire new employees if some of your old employees will not return.
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