{"id":9355,"date":"2020-04-30T13:39:54","date_gmt":"2020-04-30T18:39:54","guid":{"rendered":"https:\/\/www.cainwatters.com\/digitalblogs\/?p=9355"},"modified":"2020-11-16T14:13:01","modified_gmt":"2020-11-16T20:13:01","slug":"ppp-qualified-payroll-expenses","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/ppp-qualified-payroll-expenses\/","title":{"rendered":"Setting Your Payroll Expenses to Comply with PPP Qualified Expenses"},"content":{"rendered":"\t\t
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Planning for salary & wages, healthcare and retirement funding during the 8-week forgiveness period<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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On April 27, the second round of Paycheck Protection Program (PPP) funding was released.\u00a0 A total of $310 billion was allocated and as of today, most CWA clients have either received or secured their SBA funds.\u00a0 With that, we wanted to readdress the qualified expenses and how to approach the 8-week qualified period.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Note:\u00a0 We are still awaiting further guidance on forgiveness.\u00a0 This was initially promised to be delivered on April 26, but has yet to be received. Our suggestions may change based on any new developments in the SBA final rule. This blog is our thoughts with the information we have as of April 30, 2020.<\/em><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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UNDERSTANDING THE QUALIFIED PERIOD<\/strong><\/h5>

A borrower has 8-weeks from the receipt of the PPP funds to spend the proceeds on qualified expenses in order to achieve some level of forgiveness<\/em><\/strong>.\u00a0 For example, if a borrower received their funds on April 30, they would have until June 25, 2020 to spend the proceeds to obtain forgiveness.\u00a0 We recommend each client note their 8-week end date on their calendar<\/u>.<\/p>

Note:\u00a0 We do not expect that many borrowers will be able to spend all of their proceeds on qualified expenses during the 8-week period.\u00a0 This will leave an amount that is not forgivable.\u00a0 Borrowers can continue to use these PPP funds on qualified expenses after the 8-week period, but these amounts will need to be repaid.\u00a0 <\/em><\/p>

75\/25 RULE<\/strong><\/h5>

Qualified salaries will be the primary driver of the forgivable amount.\u00a0 At least 75% of the forgivable amount will be salary related expenses (salary, health, pension) while the other qualified expenses of rent, utilities and interest on practice related debt is capped at 25%.<\/p>

Example: If you have $60,000 in qualified salary expenses during the 8-week period, the amount of rent, utilities and interest would be capped at $20,000.\u00a0 Any additional amounts spent on these qualified expenses will need to be repaid. <\/em><\/p>

SALARY & WAGES<\/strong><\/h5>

Any wages paid to employees during this time will be included, but what is less clear is wages paid to owners and associates making over $100,000 and family salaries.<\/p>