However, the health, welfare, and pension components of union benefit contributions have been accepted as approved payroll expenses by PPP applicants. The limits of the PPP remain the same: 2.5x average monthly approved payroll expenses, a $100,000 annual compensation calculation cap per employee, and a loan maximum of $10 million.
What types of retirement benefits are forgivable under the PPP?
The U.S. Department of Treasury also explained that forgivable retirement benefits under the PPP include both defined benefit plans (such as defined pension plans) and defined contribution plans (such as 401k group retirement plans).
Are union pension and welfare contributions included in payroll costs?
Given those guidelines, and pending future guidance clarifying otherwise, union pension and welfare contributions should be included in total payroll costs. 3. If I’m the owner of an LLC taxed as a partnership, are guaranteed payments included in payroll costs?
Does the PPP cover payroll costs?
Yes, the PPP covers payroll costs, which include employee benefits such as costs for parental, family, medical, or sick leave. However, it is worth noting that the CARES Act expressly
Can employers “double-dip” on PPP?
Essentially, employers cannot “double-dip” by receiving tax credits for any payments made towards paid sick time or paid expanded family and medical leave, on the one hand, while also being fully forgiven for those same payments under the PPP.
Are union benefits included in PPP forgiveness?
However, the health, welfare, and pension components of union benefit contributions have been accepted as approved payroll expenses by PPP applicants.
What employee benefits are included in PPP?
Yes, the PPP covers payroll costs, which include employee benefits such as costs for parental, family, medical, or sick leave.
What counts as payroll expenses for PPP?
Payroll costs under the PPP program include: Salary, wages, commissions, tips, bonuses and hazard pay (capped at $100,000 on an annualized basis for each employee)
What is excluded from PPP payroll costs?
PPP loans covers payroll costs, including costs for employee vacation, parental, family, medical, and sick leave. However, the CARES Act excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Public Law 116–127).
What wages can be used for PPP forgiveness?
A: Employee gross pay (salary, wage, commission, bonuses, tips, or similar compensation) can only be forgiven for employee earnings up to $100,000 on a prorated basis.
Is payroll tax included in PPP?
No. Payroll costs are to be calculated on a gross basis without regard to federal taxes imposed or withholds such as the employee and employers share of FICA and income taxes withheld from employees.
Is health insurance a payroll expense for PPP?
Yes. The amount an employer pays for gr oup health plan coverage for employees, such as a portion of gr oup health plan premiums, is a payroll cost for PPP loan purposes.
Can owners salary be included in PPP?
Yes, essentially! You can treat the Owner Compensation Replacement as personal income and use it however you want. With guidance allowing for 2.5 months' worth of net or gross profit as OCR, that means your entire PPP loan could be used for personal purposes.
Do bonuses count towards PPP forgiveness?
Yes! The SBA has finally clarified that bonuses paid to employees, including hazard pay and commissions, are eligible for forgiveness. However, bonus pay is considered one part of total compensation, which cannot exceed an annualized rate of $100,000 (or $15,385 for an 8-week period, $46,154 for a 24-week period).
New PPP Eligibility Rules
Labor unions, VEBA Trusts, and certain other 501 (c) organizations became eligible for PPP loans under the American Rescue Plan Act of 2021 (ARPA). To qualify, organizations must meet the following requirements:
PPP Loan Details
First-draw PPP loans are limited to $10 million. Organizations may choose the length of their forgiveness period up to 24 weeks. PPP loans are based on 2.5 times the average monthly payroll costs from 2019 or 2020.
What is PPP in 2021?
A provision of the American Rescue Plan Act of 2021 extends eligibility for forgivable Paycheck Protection Program (“PPP”) loans to labor organizations and certain benefit plans. Following are the eligibility requirements for “additional covered nonprofit entities”:
When does the PPP loan expire?
The Federal Reserve Board announced earlier this week that it will extend the expiration date of the PPP servicing from March 31, 2021 to June 30, 2021. However, it is unclear whether this will also be followed by the Treasury, Congress and/or the SBA. So, do not delay to get your labor organization or benefit plan’s PPP loan application submitted ...
How to calculate PPP loan forgiveness?
Your organization may qualify for up to a $10m loan, calculated as follows: Step 1: Compute 2019 payroll costs based on the formula noted here. Step 2: Divide Step 1 by 12. Step 3: Multiply Step 2 by 2.5.
What percentage of the loan proceeds are spent on payroll?
Employee and compensation levels are maintained; The loan proceeds are spent on payroll costs and other eligible expenses; and. At least 60 percent of the proceeds are spent on payroll costs.
Can labor unions apply for PPP loans?
Paycheck Protection Program (PPP) Loans. Under the American Rescue Plan Act (ARPA), labor unions are now eligible to apply for PPP loans. These loans are administered by banks and have forgiveness features if the loan is spent on qualified expenses.
Can I defer PPP loan?
It’s important to note that employers that received a PPP loan may not defer the deposit and payment of the employer’s share of social security tax that is otherwise due after the employer receives a decision from the lender that the loan was forgiven.
Can a union know if an employee is not working?
YES, as the employee continues to be paid. The union would not know if the employee is actually working or just sitting at home and effectively getting paid for not working. There is no harm in asking the union, in writing, what their position is on the deduction/remittance of dues.
Do union dues have anything to do with the Cares Act?
Remember, it is the employee’s money, not the employer’s. This is a long way of saying that union dues have nothing to do with the CARES Act and how the amount the employer is seeking is calculated. If you have any questions, please feel free to contact our Labor & Employment Group.
Can union dues be deducted from wages?
By way of further background, a union dues deduction is strictly a product of a CBA. Under the law , an employer is permitted to deduct from an employee’s wages the amount of dues that the employee has authorized.
What are the benefits of an employee?
Employee benefits, including: severance pay; cash payments for vacation; parental, family, medical or sick leave; the employer-paid portion of group health care benefits (including vision and dental); payment of any retirement benefits; and the employer portion of state income taxes.
Can Wipfli help with PPP?
Our experienced team at Wipfli can help quickly determine your eligibility for a loan under the PPP. If you meet the requirements, we can work with you to complete or determine the best way to complete your loan application. Click here to learn more.
Does employer health insurance count toward the $100k cap?
A: Yes, as long as the SUTA and city taxes were paid within the covered period. Q: It looks like employer paid health insurance premiums and employer retirement contributions do NOT count toward the $100k cap.
Can you get forgiveness for expenses paid during the covered period?
A: Expenses paid for costs that were incurred or paid during the covered period will be eligible for forgiveness. If there are costs incurred that are paid on or before their next due date (but after the covered period:, those are considered eligible for forgiveness.
Is PPP tax deductible?
A: Yes, the Consolidations Appropriations Act of 2021 gave clarification that expenses paid with PPP funds are tax deductible. Q: If we received the funds on 4/15/2020. The first pay date after that was 4/17/2020. This was for wages of 4/9 to 4/15/2020.
Is dental insurance included in payroll?
A: Yes, dental insurance premiums are included as eligible payroll costs. Q: I did not understand the Alternative Covered Period. We received our loan on April 8th – we pay for the 1st to the 15th on the 15th and we pay 16th through last day of month is paid on the last day of the month.
Is PPP loan income taxable?
A: It will be book income, not taxable income. Under the Consolidations Appropriations Act of 2021, PPP Loan proceeds are not included in income and expenses paid with forgiven funds are tax deductible. Q: Has anything changed that a 1099 employee can be counted towards the total PPP Loan.
