Newsletter from

Steve Richardson & Company

Certified Public Accountants

April 27, 2020

PPP Loan &
the Minister’s Housing Allowance (part 2)

Dear Clients and Friends:

The SBA has made it official: the minister’s housing allowance is a part of wages for purposes of the PPP Loan application.

See the following link to the US Treasury Department’s website, Paycheck Protection Program Loans Frequently Asked Questions (as of April 26, 2020), and look at Question 32:

32. Question: Does the cost of a housing stipend or allowance provided to an employee as part of compensation count toward payroll costs?

Answer: Yes. Payroll costs includes all cash compensation paid to employees, subject to the $100,000 annual compensation per employee limitation.

One Issue Still Remains
There is no flat statement that the minister’s housing allowance is also a part of wages for purposes of PPP Loan forgiveness, although I strongly suspect that we will have clarity on this issue soon. Based on the above response to Question 32, the SBA/US Treasury may believe that this issue is fully resolved.

Even without clarity on forgiveness, with a bit of planning, the forgiveness related to the minister’s housing allowance can be made a non-issue. During the eight weeks of the PPP Loan spending cycle, do not pay housing. Convert all housing to normal wages. Subsequent third- and fourth-quarter tax planning can make the related tax issues more manageable.

Sincerely,

Steve Richardson, CPA