Yesterday, we identified several new SBA rules that were included in the forms and instructions for loan forgiveness published on May 15. Based on further review of the forms and instructions there is an additional rule we would like to point out.
Calculation of the $100,000 Annualized Payroll Cost Limit is Different for Owners
The SBA previously indicated that the $100,000 limit applies only to gross pay and does not apply to employer contributions to retirement plans, health care, or state and local employment taxes. Based on the new SBA guidance included in the instructions, this rule only applies to compensation for non-owners. For any individuals who are owners of the business, all the benefits included in the payroll cost calculation are subject to the $100,000 annualized income limit. Thus, the total forgiveness for payroll costs for an owner are subject to the $15,385 limit including all payments of retirement plan contributions, employee health insurance, and state and local employer taxes.
For non-owner employees, these benefit costs continue to be excluded from the $15,385 limit.
If you have any questions about PPP loans and this development, reach out to us at 303-989-7600.