Thread by @RavenousTiger

So it's like 4 months later but we got 10 pages of PPP Forgiveness Application FAQ. home.treasury.gov/system/files/1…

I've read through and there are some interesting things in there, definitely a couple curveballs and then a bunch of examples. Thankful they are finally using examples.

Page 1, Q1 people without employees should use the EZ application, well duh.
Q2. Esignatures are ok! Hopefully this trend of allowing them continues into other areas.
Q3. No payments until forgiveness is ruled on. Confirming the understanding here.

P2, Q1. Finally a good example of how the payroll incurred during but paid after the covered period will count towards payroll cost.
Q2 is the same thing but for the costs incurred prior and paid during the CP. Huzzah! That's what I've been telling people for months

P3, Q3. Partial periods also works or payroll to capture incurred during the CP and paid on the regular payroll date after the CP ends.
Q4. Use gross wages, not net. I'm not sure it was even necessary, but here it is.
Q5. Use all the comp to employees, also obvious.

P3. Q6. Defines the group healthcare costs nicely. It's the employer share of the group health plan, not employee portions. Also no accelerating these costs into the CP.

Q7. Defines the retirement plan contributions very similarly to the group health, the employer portion only.

P4. Q8 is a two page breakdown with examples of owner comp between the various entity choices. C Corp, S Corp, Partnership, Sch C/F. I guess I don't see anything here that's new compared to the prior guidance, but it's nicely broken into each entity type.

P6. Q1 and Q2. These are for nonpayroll costs and they are corollary to the payroll costs where they can be incurred prior and paid during, or incurred during and paid after the CP and all will count.

Q3. Alternative Payroll CP counts for, you guessed it, only payroll.

P7. Q4. Interest on unsecured debt does not count towards forgiveness. Quirky here because its an ok use of PPP Funds you just don't get forgiveness.

Q5. Refi of mortgage that existed 2-15-20 is still ok. Same for a lease that existed and was subsquently renewed. Good news.

P7. Q6. Finally a definition of transportation costs and it's not how I saw anyone interpret this originally. It's the transportation utility fees assessed by local and state governments for like road fees and that kind of thing. Seems like a rare thing. So no car expenses.

P7. Q7. Entire electricity bill is ok to use.

P8. Q1. FTE reduction is avoided when jobs are offered and declined by potential employees. Also avoided if unable to hire qualified individuals for unfilled positions. Need to report declined offers to unemployment office.

P8. Q2. Seasonal employers use same 12 week period for application and for reductions to forgiveness in both years.

Q3. Even the highly paid employees are subject to the FTE reduction. Clarifies a question no one was asking.

P8. Q4. Mega answer for how to calculate the wage reduction limitation. This is the first real guidance for how this should work and with 3 lengthy examples. Reminder this is only employees who made less than $100k in 2019 or annualized during a 2019 pay period.....

... Example 1 is a salary employee. Ex 2 is hourly employee. Goes through step by step how to calculate the reductions. Ex 3 is the one for when the employee goes full time to part time there is zero wage reduction since it's taken into account in the FTE calculation instead.

P10. Q5. For wage reduction "borrower should only take into account decreases in salaries and wages" which seems to mean all the tips and commissions are not counted. This is great news for salons, restaurants, sales people where huge commissions or tips in the employee wages.

Thus concludes the breakdown. Some good info in there, not sure why we couldn't get this in May or June or July, but we'll take it. Just in time for congress to pass another new round of stimulus with changes to the PPP rules.

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