The Paycheck Protection Program was passed into law on Friday, March 27 and now many banks are accepting applications for these loans. The loan program has been allocated $359 billion dollars and when that money is gone, the program is over. We urge all of you to consider this program, contact your banker and start this application process immediately.

If you need assistance, WS CPAs are available. Please fill out our contact form on this page, our sincere goal is to help our clients and communities through this unprecedented time.

The PPP program allows businesses and nonprofits to apply for a forgivable loan.  The loan amount is based on 2.5 times your monthly payroll.  Then if you use those loan funds for payroll, certain other payroll related costs, rent, or interest on preexisting loans, the PPP loan amount can be forgiven.  To the extent the loan is not forgiven, the interest rate on the remaining loan is 1% and the loan is repayable over 2 years.  Of course, the loan program has additional details and restrictions.

Eligible payroll expenses for purposes of calculating the “average monthly payroll” amount on the SBA application for the Paycheck Protection Program (PPP) include:

• Gross wages (which include wages paid out for vacation, sick leave, and PTO)
• Payment for group health insurance premiums (net cost to business after factoring in employee paid share of premiums)
• Payments for the company match portion of retirement plan benefits
• State unemployment taxes paid

 The following do NOT count for purposes of calculating the “average monthly payroll cost” amount:

• Any wages in excess of $100,000 per employee
• Social Security and Medicare taxes
• Income taxes withheld on wages

Included in the initial guidance we received is how the PPP program will apply to the self–employed. For those of you operating a proprietorship (Filing Schedule C or F),  please see the “self-employed” section of the attached loan estimator spreadsheet below.