On Friday, May 22, the Small Business Administration (SBA) and Treasury Department issued an interim final rule on the Paycheck Protection Program (PPP) loan forgiveness.
The rule states that as long as an employee’s total compensation is less than $100,000 annually, bonuses and hazard pay are eligible for loan forgiveness because they are considered a supplement to salary or wages. The rule also clarifies that salary, wages, or commission payments to furloughed employees are eligible for forgiveness.
Still, be wary of awarding atypical bonuses and hazard pay to be on the safe side. Speak to an accountant or your lender before making a decision.
Additionally, there is a new initiative, MBAs Fight COVID-19, offering pro bono help to small businesses. Current MBA students are matched with businesses to provide help on a variety of projects (PPP, EIDL, cost cutting, etc.). Get help here.
Utilize a series of videos from Finch CPA Firm walking you through the PPP forgiveness application. Access the videos here (slide 50).
For more information about PPP loan forgiveness, read ABA’s comprehensive article here.