Newsletter from

Steve Richardson & Company

Certified Public Accountants

April 22, 2020

PPP Loan Forgiveness 

Dear Clients and Friends:

My Mistake!
I made a mistake in my last newsletter. Employer-paid Social Security, Medicare, and federal unemployment taxes are not CARES ACT wages for PPP Loan forgiveness purposes. I just assumed that since these employer taxes are CARES ACT wages for the purpose of getting the PPP Loan that they would be part of the loan forgiveness calculation. Wrong!

My first mistake was in assuming! When the government writes the rules, it is against the rules to assume anything.

Every day my understanding of the PPP Loan forgiveness rules evolves.

Housing Allowance
My understanding of housing allowance as a part of the CARES ACT is also evolving.

I’ve made compelling arguments that minister’s Section 107 housing allowances are ‘wages’ for purposes of the CARES ACT.

Did I really win?
I actually won that argument with a loan underwriter – once! But he told me, in no uncertain terms, that it may be wages for the PPP Loan but, it is, not wages for the PPP Loan forgiveness. Apparently there is a more definitive list of CARES ACT wages for the loan forgiveness than there is for the loan application.

The bottom-line: housing allowance is not CARES ACT “wages” for PPP Loan forgiveness. That is unlikely to change before June 30, 2020.

Amy
Amy Foster proofread this short memo; Amy is my trusted colleague and cohort. In her sage voice, she said, “Wait until tomorrow to mail this out; you know it will all be different by then.”

She has a point.

Sincerely,

Steve Richardson, CPA