Robyn Miller answers your questions related to loans under the SBA Economic Injury Disaster Loan Program (EIDL) and the Payroll Protection Program under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act).
Please also take a look at these resources below:
- How to Get Loans Under The CARES Act: The Paycheck Protection Program
- Loans Available under the SBA’s Economic Injury Disaster Loan Program
- Families First Coronavirus Response Act: New Family Leave and Sick Leave Obligations for Employers Signed into Law and FAQs on FFCRA
- Webcast resources by our partners at Barnes & Thornburg (you may need to share your email address to view these webcasts).
Since hosting this webcast, the SBA issued FAQs which change two of Robyn’s answers from the webcast:
Question: The CARES Act excludes from the definition of payroll costs any employee compensation in excess of an annual salary of $100,000. Does that exclusion apply to all employee benefits of monetary value?
Answer: No. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, including:
- employer contributions to defined-benefit or defined-contribution retirement plans;
- payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums; and
- payment of state and local taxes assessed on compensation of employees.
Question: How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven?
Answer: The answer provided is complicated, and we suggest you reach out to your payroll provider and/or accountant.
Click here to go to the SBA FAQs.