For purposes of loan forgiveness, however, the borrower will have to document the proceeds used for payroll costs in order to determine the amount of forgiveness.
For purposes of determining the percentage of use of proceeds for payroll costs, the amount of any Economic Injury Disaster Loan (EIDL) refinanced will be included. Remember that at least 75 percent of the PPP loan proceeds shall be used for payroll costs. Independent contractors have the ability to apply for a PPP loan on their own, so they do not count for purposes of a borrower’s PPP loan forgiveness. Independent contractors have the ability to apply for a PPP loan on their own, so they do not count for purposes of a borrower’s PPP loan calculation.ĭo independent contractors count as employees for purposes of Paycheck Protection Program (PPP) loan forgiveness? Qualified sick and family leave wages for which a credit is allowed under sections 70 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116–127)ĭo independent contractors count as employees for purposes of Paycheck Protection Program (PPP) loan calculations?.Federal employment taxes imposed or withheld between February 15, 2020, and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees.The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary.Any compensation of an employee whose principal place of residence is outside of the United States.The Act expressly excludes the following: Is there anything that is expressly excluded from the definition of payroll costs? for an independent contractor or sole proprietor, wage, commissions, income, or net earnings from self-employment or similar compensation.payment of state and local taxes assessed on compensation of employees.payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement.payment for vacation, parental, family, medical, or sick leave.cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips).salary, wages, commissions, or similar compensation.Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of: What qualifies as “payroll costs” under the Payment Protection Program (PPP)?
The most important thing to remember if you apply for this program is to document, document, document. While there is a lot of speculation surrounding payroll costs as they pertain to the Paycheck Protection Program (PPP), below are answers to questions that we have at this time.