On Saturday the SBA released the application for forgiveness for Payroll Protection Program loans. In addition to providing guidance on the full time equivalents (40 hours versus 30 originally indicated) and what is included in Utilities, another huge change was buried within that guidance.
UPDATE TO OWNERS SALARIES FOR LOAN FORGIVENESS
Contrary to what we have been telling our clients all along, especially those that are single member LLC S Corporations that have minimal applicable overhead expenses, the SBA has modified the inclusion of owner’s wages for PPP Loan Forgiveness to be the lesser of 1) average salary per pay period for calendar year 2019 or 2) $100,000 of salary/number of pay periods. This new guidance is apparently intended to ensure that owners CANNOT pay themselves more than their 2019 average wages per pay period over the 8-week spending period and achieve 100% loan forgiveness.
For those that have been paying themselves enough in wages to utilize 100% of their loan, or have given themselves an increase in lieu of paying staff members more, you have limited time to cure this situation with your remaining pay periods available.
WEBINAR Wednesday 5/20/2020 10:30 AM
We are updating the webinar content to include this an all other very recent guidance changes and what you can do to cure this situation and still achieve maximum potential loan forgiveness. We have extended the registration deadline to 8:00am tomorrow morning (May 20th) to accommodate any of you that wish to participate. Please email LYS@phocuscompanies.com to register. We HIGHLY RECOMMEND that any and all business owners that have received PPP funding tune in for these critical updates.