New FAQ Allows Retention Credits if PPP Funds Turned back in by May 14

Subsequent to the publishing of this item, the Treasury/SBA released FAQ 47 which further extends the below discussed certification’s safe harbor to May 18, 2020 here

May 7, 2020

The Treasury Department published further guidance concerning a key borrower certification made on the Paycheck Protection Program (PPP) loan application which we wrote on here. Under this guidance, borrowers who return their PPP funds by May 14, 2020 would be deemed to have made their certification for the need of the loan in good faith. Further guidance on what this may mean for employee retention credits was issued here, as question 45.

Employers Repaying PPP Funds by May 14 under Safe Harbor Eligible for Tax Credits

The Treasury released FAQ 45 late on Wednesday May 6, 2020 which included provisions for those returning PPP funds under the safe harbor allowance by May 14, 2020. This FAQ states that those returning funds by the allowed for date will be eligible for the Employee Retention Credit and deemed to not have received the PPP funds for purposes of determining eligibility for the Employee Retention Credit. These items were previously covered by KHA here.

What is unclear is whether or not this same guidance applies to the delayed payment of employer payroll taxes which was also precluded for those borrowers applying for and receiving a PPP loan.

As your trusted advisors, we are committed to keeping you well-informed with any new legislation passed by Congress or other authorities as well as any new pronouncements by the Department of Treasury that may affect you. Please do not hesitate to reach out to KHA with any additional questions you may have.

These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. This by no means is a recommendation to obtain a loan or attempt to apply for a loan. There are many unknowns at this time regarding what other stimulus (grants or other loan options) may become available with pending and future bills, executive orders, or emergency declarations to follow, that may become laws. Consult your legal and business advisors prior to making financing decisions. This is intended for illustrative and discussion purposes only.