What documents are needed for Payroll Expenses?

• Bank account statements or third-party payroll service provider reports documenting cash compensation paid to employees
• Tax forms or equivalent third-party payroll service provider reports for: payroll tax filings and state quarterly wage reporting and unemployment insurance tax filings
• Payment receipts, cancelled checks, or account statements documenting employee health insurance and retirement plan contributions
• FTE Documentation: any employee job offers and refusals, firings for cause, voluntary resignations, and written requests by any employee for reductions in work schedule; documentation showing average number of FTE employees

What documents are needed for Non-Payroll Expenses?

• Business mortgage interest payments:
  • Amortization schedule and cancelled checks OR
  • Bank statements from February 2020 and covered 8- or 24-week period
• Business rent and lease payments:
  • Copy of current lease and receipts OR
  • Cancelled checks or bank statements from February 2020 and covered 8- or 24-week period
• Business utility payments:
  • Copy of invoices from February 2020 and those paid during the covered 8- or 24-week period AND
  • Receipts, cancelled checks, or account statements

What costs are eligible to be forgiven?

The PPP Flexibility Act revised the payroll requirement to 60% usage for payroll costs (Payroll expenses, including health and retirement benefits, and payment of state and local taxes.) Note: Owner-employees and self-employed individual payroll compensation capped at lesser of 8/52 of 2019 compensation levels or $15,385 for the 8-week covered period or (2.5/12) of 2019 net profit up to $20,833 for the 24-week covered period per individual in total across all Businesses, and does not include health benefits or retirement plan contributions. 40% usage for other eligible business expenses (Interest on business mortgage obligations, rent/leases, and utilities). Note: mortgage loans, utilities, rent and lease agreements had to be in effect before February 15, 2020.

Is interest on non-mortgage debt a forgivable expense, such as term debt, Line of Credit (LOC) or Credit Card (CC) debt?

No, the only interest payments that can be forgiven is on a business mortgage obligation on real or personal property that was incurred before February 15, 2020. A loan secured by movable personal property is a chattel mortgage (as opposed to a conventional mortgage).

How will my Economic Injury Disaster (EIDL) Advance impact my PPP loan forgiveness?

The SBA will deduct EIDL Advance amounts from the loan forgiveness amount prior to remitting funds to M&T.  Please note, the EIDL Advance is different than the EIDL Loan.

Are bonuses/ hazard pay permitted?

If an employee's total compensation does not exceed $100,000 on an annualized basis, the employee's hazard pay and bonuses are eligible for loan forgiveness because they constitute a supplement to salary or wages, and are compensation. As a reminder for the self-employed and partners, it cannot exceed 8/52 or (2.5/12) of 2019 net profits.

What happens if I use funding from the PPP for non-eligible expenses?

Per SBA guidance, if you use PPP funds for unauthorized purposes, the SBA will direct you to repay those amounts. If you, one of your shareholders, members, or partners knowingly uses PPP funds for unauthorized purposes, the SBA will very likely take recourse, which could include charges for fraud. Please consult tax, legal or accounting advisors for professional advice.

What is the maximum amount of loan forgiveness that can be requested for the payroll compensation of owner-employees and self-employed individuals?

Compensation for 8-week covered period is capped at lesser of 8/52 of 2019 net profits or $15,385 per individual in total across all businesses.

Compensation for 24-week covered period is (2.5/12) months' worth of 2019 net profit up to $20,833 per individual in total across all businesses. Excluding any qualified sick leave amount for which a credit is claimed under the Families First Coronavirus Response Act (Section 7002 or 7004)

What will a reduction in employees' salary or wages have on the loan forgiveness amount?

A reduction in an employee's salary or wages in excess of 25% will generally result in a reduction in the loan forgiveness amount unless an exception applies. For each new employee in 2020 and each existing employee who was not paid more than the annualized equivalent of $100,000 in any pay period in 2019, the borrower must reduce the total forgiveness amount by the total dollar amount of the salary or wage reductions that are in excess of 25% of base salary or wages between January 1, 2020 and March 31, 2020. This is subject to exceptions for borrowers who restore reduced wages or salaries. This reduction calculation is performed on a per employee basis, not in the aggregate.

What do I do with employees that refuse to come back to work?

If a return to work offer at the same salary/wages/hour was rejected by an employee, the borrower must maintain records documenting the written offer and its rejection and inform the applicable state unemployment insurance office of such employee's rejected offer of reemployment within 30 days of the employee's rejection of the offer. The SBA will be posting state unemployment offices on the SBA website.

Can I rehire employees that were laid off or put on furlough?

Yes