Brian A. Haskel, Alan E. Sherman, Jason L. Sobel, Lori M. Waldron
April 16, 2020
This alert updates prior publications and
communications from our firm on the subject matter discussed below. It is
likely that there will be additional guidance in the future from the SBA
and other government agencies that may conflict with prior guidance.
In response to
various frequently asked questions from OUR clients, please note the following:
Question: Is there a minimum amount of the PPP loan proceeds
that the borrower is required to use to pay payroll costs?
Answer: Yes, a borrower is
required to use at least 75% of the PPP loan proceeds for the payment of
payroll costs. Additionally, for purposes of forgiveness of the PPP loan,
at least 75% of the forgivable amount must have been used to pay payroll costs.
Question: For purposes of
calculating the reduction in loan forgiveness amount based on a reduction in the
salary of an employee in excess of 25%, are all employees included?
Answer: Only employees who did not receive, during any
single pay period during 2019, wages or salary
at an annualized rate of pay in an amount more
than $100,000 are included in the calculation.
Question: Is self-employment
income of active general partners of a partnership included in the calculation
of payroll costs?
Answer: In calculating payroll costs of a partnership,
self-employment income of active general partners of the partnership, up to
$100,000 annualized, may be treated as a payroll cost.
This Client Alert has been prepared by Sills Cummis & Gross P.C. for informational purposes only and does not constitute advertising or solicitation and should not be used or taken as legal advice. Those seeking legal advice should contact a member of the Firm or legal counsel licensed in their state. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship. Confidential information should not be sent to Sills Cummis & Gross without first communicating directly with a member of the Firm about establishing an attorney-client relationship.