NEW Paycheck Protection Program (PPP) Loan Forgiveness Guidance
A new interim final rule was released last night addressing several issues related to the qualification of certain expenses for PPP loan forgiveness.
The first provision of the new rule provides that the term owner-employee does not include owners with less than a 5% ownership stake in the company. This rule applies to both C and S corporations. As such, the compensation of these individuals is not limited as it is for other owner-employees.
Regarding rent or lease payments, amounts paid under a related party lease are limited to the actual amount of mortgage interest owed by the lessor. In addition, mortgage interest payments to a related party are not eligible for forgiveness.
DunlapSLK remains committed to keeping you updated on any new PPP guidance that is released. At this time we continue to recommend patience in applying for forgiveness. There are still many unanswered questions related to the forgiveness application. It is our recommendation that you await the anticipated guidance. There is no rush to apply as each borrower has 10 months from the end of their covered period.
If you have questions please contact your DunlapSLK Team member.