28. Dezember 2020 | Kieu Bui
SBA Problems Alternative PPP Loan Forgiveness Guidance
Nonpayroll Expenses
Timing of Payment of Nonpayroll Expenses. Qualified nonpayroll expenses (home loan interest, utility and rent re re payments) incurred before, but paid throughout the Covered Period, meet the criteria for forgiveness. Qualified nonpayroll expenses incurred during, but paid following the Covered Period, meet the criteria for forgiveness if compensated on or prior to the next regular payment date. Keep in mind that the choice Covered Period is not employed for purposes of calculating nonpayroll expenses, whether or not the debtor elects to utilize the choice Covered Period for purposes of calculating payroll expenses.
Interest on Credit Card Debt. Borrowers may use PPP loan proceeds to pay for interest on unsecured credit incurred before February 15, 2020, but expenditures that are such perhaps maybe not qualified to receive forgiveness.
Renewed Leases or Refinanced Debt. Lease re payments made under a renewed rent and interest re payments made on refinanced home loans meet the criteria for forgiveness in the event that lease that is original home loan existed just before February 15, 2020.
Clarification of Transportation Expenses. The meaning of energy re re payments within the CARES Act includes “transportation costs,†plus the SBA has clarified that “transportation costs†are transportation energy charges assessed by state or governments that are local. 4
Electricity Expenses. Electricity expenses qualified to receive forgiveness include supply costs, circulation fees along with other fees such as for instance gross receipts fees, even when those quantities are charged on split bills.
Loan Forgiveness Reductions
Refused Employment Has. For purposes of determining a reduction in full-time workers, borrowers must not consist of workers who have been let go and rejected the borrower’s rehire offer. Borrowers must notify the continuing state jobless insurance coverage office of these a rejection within 1 month of this rejection. Borrowers should keep written documents associated with offer, the employee’s rejection and efforts to engage a similarly qualified individual, which is used to augment the forgiveness application.
Seasonal Companies. Regular companies must make use of the exact same reference that is 12-week in 2019 and 2020 for purposes of calculating any reductions into the forgiveness quantity.
2019 Compensation more than $100k. For purposes of determining the employee that is full-time, borrowers will include workers whom obtained more than $100,000 in 2019.
Settlement Reductions and Forgiveness Reductions. The forgiveness amount is reduced by the compensation reduction in excess of 25%, unless the reduction is corrected prior to the earlier of the last day of the Applicable Covered Period or December 31, 2020 if a Borrower reduced the salary or wages of a covered employee 5 more than 25% during the Applicable Covered Period. a decrease this is certainly 25% or lower than the employee’s income or wages will maybe not decrease the forgiveness amount that is eligible.
Determining Salary/Wage Reduction. When reductions that are calculating the forgiveness amount based upon reductions in settlement, just reductions in salaries or wages must certanly be utilized.
1 This scenario is certainly not relevant to Borrowers whom elect to make use of the choice Covered Period as the Alternative Covered Period begins in the very very first time regarding the pay https://cashlandloans.net/payday-loans-ut/ that is first and, because of this, no payroll expenses would be incurred before the Alternative Covered Period.
2 Borrowers who received loan profits ahead of June 5, 2020, can elect to make use of the first Covered Period, which can be the period that is 8-week the mortgage disbursement date.
3 The Alternative Covered Period is an alternative for Borrowers with biweekly, or higher regular, payroll schedules. Borrowers whom received loan profits just before June 5, 2020, can elect to utilize the first Alternative Covered Period, that is the 8-week period after the very first time of this very first pay duration after the loan disbursement date.
5 “Covered employee†means a worker used by the Borrower throughout the Applicable Covered Period, with a place that is principal of in the U.S. and annualized settlement lower than or add up to $100,000 for several pay durations in 2019.
For more information about this subject, be sure to contact your regular attorney that is calfee one of many attorneys down the page.
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