SBA PPP and EIDL Small Business Loans (some money is forgivable)

[TBD]

I’m not taking for granted that the bankers verbal assurance that I was issued an SBA means I’m getting a loan through Dime.

Maybe it’s true, maybe I have SBA approval through another lender and they just didn’t get around to notifying me, or maybe I didn’t get any approval at all. We’ll find out soon enough.

Btw I know someone who applied by Dime and Paypal, both of them declined him because he has already an SBA number

[TBD]

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes.  iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees;

https://www.sba.gov/sites/default/files/2020-04/PPP%20Interim%20Final%20Rule_0.pdf


Anyone knows a lender who asked to exclude the FICA amount from the EMPLOYEES part in the payroll calculation?

[cgr]

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes.  iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees;

https://www.sba.gov/sites/default/files/2020-04/PPP%20Interim%20Final%20Rule_0.pdf


Anyone knows a lender who asked to exclude the FICA amount from the EMPLOYEES part in the payroll calculation?

My understanding is that all federal taxes were excluded in all calculations (loan and forgiveness)

[TBD]

My understanding is that all federal taxes were excluded in all calculations (loan and forgiveness)

But all calculations were based on gross wages from forms W-3/940/941/NY-45. I dont think any bank excluded the FICA tax witholdings

[AsherO]

Btw I know someone who applied by Dime and Paypal, both of them declined him because he has already an SBA number

Did he apply elsewhere? Maybe fraud or someone with similar EIN/SSN who made an error?

[cgr]

But all calculations were based on gross wages from forms W-3/940/941/NY-45. I dont think any bank excluded the FICA tax witholdings

That's your mistake then and their's for approving it. Shouldn't have been included.
W-3/940/941/NY-45 were provided as documentation to proves a) wages b) state and local tax

[aygart]

Note that guestions 39 and below had all been previously published. The footnotes give a date for different questions.

[TBD]

That's your mistake then and their's for approving it. Shouldn't have been included.
W-3/940/941/NY-45 were provided as documentation to proves a) wages b) state and local tax

Federal tax is not excluded neither, only FICA tax

[TBD]

If this is true than all ppl who are going to have a separate account to keep tab, will still have to divide the IRS tax withholdings as part of it will be forgivable (Federal Tax) and part not (FICA)

[aygart]

IIRC this is a question which was asked here:

15. Question: Should payments that an eligible borrower made to an independent contractor or sole proprietor be included in calculations of the eligible borrower’s payroll costs?
Answer: No. Any amounts that an eligible borrower has paid to an independent contractor or sole proprietor should be excluded from the eligible business’s payroll costs. However, an independent contractor or sole proprietor will itself be eligible for a loan under the PPP, if it satisfies the applicable requirements.

[TBD]

SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on a limited basis only to provide relief to U.S. agricultural businesses.


Can we file a lawsuit against this discrimination?

[aygart]

SBA will begin accepting new Economic Injury Disaster Loan (EIDL) and EIDL Advance applications on a limited basis only to provide relief to U.S. agricultural businesses.


Can we file a lawsuit against this discrimination?

Thank Mitch McConnell

[TBD]

But the application page is open. Think we should go ahead and apply even id not agriculture? Anything to lose?

[cgr]

Federal tax is not excluded neither, only FICA tax

-1

https://www.sba.gov/sites/default/files/2020-04/PPP%20Interim%20Final%20Rule_0.pdf

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes. The Act expressly excludes the following:
...
iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be
withheld from employees;...

https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2003%2020.pdf

16. Question: How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven?
Answer: Under the Act, payroll costs are calculated on a gross basis without regard to (i.e., not including subtractions or additions based on) federal taxes imposed or withheld, such as the employee’s and employer’s share of Federal Insurance Contributions Act (FICA) and income taxes required to be withheld from employees. As a result, payroll costs are not reduced by taxes imposed on an employee and required to be withheld by the employer, but payroll costs do not include the employer’s share of payroll tax...

[cgr]

If this is true than all ppl who are going to have a separate account to keep tab, will still have to divide the IRS tax withholdings as part of it will be forgivable (Federal Tax) and part not (FICA)

Since no federal tax is forgivable, you only need to keep track of 1) gross wages 2) state and local tax
Most payroll reports separate these out very clearly so shouldn't be an issue.

[TBD]

-1

https://www.sba.gov/sites/default/files/2020-04/PPP%20Interim%20Final%20Rule_0.pdf

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes. The Act expressly excludes the following:
...
iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be
withheld from employees;...

https://www.sba.gov/sites/default/files/2020-05/Paycheck-Protection-Program-Frequently-Asked-Questions_05%2003%2020.pdf

16. Question: How should a borrower account for federal taxes when determining its payroll costs for purposes of the maximum loan amount, allowable uses of a PPP loan, and the amount of a loan that may be forgiven?
Answer: Under the Act, payroll costs are calculated on a gross basis without regard to (i.e., not including subtractions or additions based on) federal taxes imposed or withheld, such as the employee’s and employer’s share of Federal Insurance Contributions Act (FICA) and income taxes required to be withheld from employees. As a result, payroll costs are not reduced by taxes imposed on an employee and required to be withheld by the employer, but payroll costs do not include the employer’s share of payroll tax...

EXPLAIN THE NEXT LINE

 For example, an employee who earned $4,000 per month in gross wages, from which $500 in federal taxes was withheld, would count as $4,000 in payroll costs.  The employee would receive $3,500, and $500 would be paid to the federal government.

[TBD]

And whats with the FICA TAX FROM THE $4k??
I think something is messed up in the guidelines

[cgr]

EXPLAIN THE NEXT LINE

 For example, an employee who earned $4,000 per month in gross wages, from which $500 in federal taxes was withheld, would count as $4,000 in payroll costs.  The employee would receive $3,500, and $500 would be paid to the federal government.

You're thinking employee side. We only care about employer side. Obviously the employee has deductions on their end after you pay them their gross wages.

[TBD]

You're thinking employee side. We only care about employer side. Obviously the employee has deductions on their end after you pay them their gross wages.

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes.  iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees;

[cgr]

g. Is there anything that is expressly excluded from the definition of payroll costs?
Yes.  iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee’s and employer’s share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees;

I can only assume employee's share of FICA is only deducted if the business or a self-employed individual pays it. They clearly state that gross wages are included, and gross wages is where the employee side of FICA is ultimately deducted from.