SBA Releases Additional Paycheck Protection Program FAQs
The FAQs are available on the U.S. Treasury website and clarify the following:
- The $100,000 limit in the payroll cost computation only applies to compensation. It does not apply to health insurance, retirement benefits, or state and local taxes assessed on income.
- Borrowers are responsible for the accuracy of their average monthly payroll cost calculation. Lenders have only a “good faith review” requirement.
- Employee FICA/Medicare tax and federal income tax withheld are not to be subtracted from gross wages when arriving at the average monthly payroll cost calculation or the loan forgiveness payroll cost calculation. However, the employer share of FICA/Medicare is not includable in the payroll cost calculation.
- The time for computing headcount for loan eligibility is a 12-month average that matches the 12-month period used for the average monthly payroll cost calculation.
The FAQs make it clear that borrowers will only be responsible for following the rules in place at the time they made their application.
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Ted serves as partner, tax counsel, and Professional Practice Leader – Tax. As a certified public accountant and tax counsel, Ted advises exempt organizations of all sizes on a wide range of issues. This includes consulting on tax and employee benefit related matters, representation before state and federal tax authorities, and assistance with firm audit or advisory engagements to formulate advice and counsel on important operating and tax issues. Ted also leads the firm’s tax preparation practice, including IRS Forms 990 and 990-T and related state forms.