You must maintain the number of employees on your payroll. The 8-week to 24-week period following your initial loan disbursement, (A) February 15, 2019 to June 30, 2019, (B1) January 1, 2020 to February 29, 2020.
How long do you need to keep employees under PPP?
If after the 24 weeks the PPP covers, your business’s financial situation has not improved, or the PPP funds have run out, you are able to put employees on furlough or lay them off if necessary. The employees would be eligible to claim unemployment benefits.
Do I have to retain employees for PPP forgiveness?
3. Count your employees — applies to most loans over $50,000: To have a PPP loan totally forgiven, a small business must also retain its workforce. Each employee who works 40+ hours per week or earns their normal full time salary counts as one employee.
Can PPP be used for new employees?
Borrowers can hire new employees to restore and maintain their original average full time employee headcount. The PPP loan forgiveness application doesn’t differentiate between new and old employees on the payroll.
Can owners pay themselves with PPP loan?
When it comes to the PPP, your payroll will be limited to the wages that you are taxed on. If you’ve been running payroll manually yourself or with the help of a CPA, so long as you have been remitting payroll taxes, you can use those salaries in your calculation to apply for the PPP.
Can I use 100% of my PPP loan for payroll?
The 60/40 rule states that 60% of your PPP loan must be used on payroll costs, and the remaining 40% can be used on other eligible expenses (rent, mortgage interest, utilities, etc.). However, as a self-employed worker, you can claim all 100% of your PPP loan as payroll under compensation replacement.
Can you fire an employee after PPP loan?
Since the majority of loan funds are supposed to be reserved for payroll, employers who receive PPP loans should be able to avoid layoffs and furloughs. Granted, loan recipients are permitted to reduce employees’ pay by 25%, so you may be paid less than you were before quarantine.
How much can owners pay themselves with PPP loan?
The PPP limits compensation to an annualized salary of $100,000. For sole proprietors or independent contractors with no employees, the maximum possible PPP loan is therefore $20,833, and the entire amount is automatically eligible for forgiveness as owner compensation share.
Can employees get unemployment and PPP?
Can I apply for a PPP loan if I am receiving unemployment assistance? Yes, but proceed with caution. There is no restriction on receiving both benefits, but as a general rule you should not use your PPP loan to cover your own compensation while at the same time receiving unemployment benefits.
What does PPP mean for employees?
As part of the $2 trillion aid package unveiled in the Coronavirus Aid Relief & Economic Security (CARES) Act, $349 billion was dedicated to the Payment Protection Program (PPP). This offers federal guaranteed loans to businesses with fewer than 500 employees to cover payroll and other essential costs.
Can I use PPP loan for 1099 employees?
Independent contractors can submit a PPP loan application through their bank or a lending marketplace. 1099 employees are now eligible to apply for their own PPP loans through their banks or a loan marketplace.
Is PPP taxable income for employees?
A related question is, is PPP taxable income for employees? According to the SBA, the answer is yes; employees receive their standard paychecks with federal taxes withheld as usual. For the employer’s side, however, the payroll cost is counted as the full amount, pre-tax.