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Retirement Benefit Expenses Covered under the CARES Act’s Paycheck Protection Program

The Paycheck Protection Program (the “PPP”) under the CARES Act aims to assist small businesses affected by COVID-19 by covering certain operating expenses as an incentive to retain employees during the crisis. Expenses, such as “payroll costs,” are used in the calculation of the amount of the available loan and in the amount that may be forgiven under the program. Notably, the PPP does not consider an individual’s compensation in excess of $100,000 annualized, prorated for the covered period, to be covered as a payroll cost. The “payment of any retirement benefit[s]” are among the payroll costs that are included. However, at this time, it not entirely clear what is intended to be included in the “payment of any retirement benefit.” No formal guidance has been issued by the IRS or Treasury, and initial guidance issued by the U.S. Small Business Administration does not shed much light on this question.… Continue Reading

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