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CARES Act: Additional Guidance on Interplay Between PPP Loans and Employee Retention Tax Credit

Under the CARES Act, employers who receive a Paycheck Protection Program (“PPP”) loan are ineligible to claim the employee retention tax credit. On May 6, 2020, the Small Business Administration (“SBA”) updated its FAQs on PPP loans to address situations when an employer received a PPP loan but now decides to repay it by the safe harbor deadline of May 14, 2020. Specifically, new Q/A-45 states that if such an employer repays its PPP loan by May 14, 2020, the employer will be eligible to claim the employee retention tax credit, provided the employer meets the other requirements to claim that credit.

The SBA FAQs are available here.

The lawyers of our Employee Benefits and Executive Compensation Practice Group are readily able to assist companies on a nationwide basis with implementing sophisticated benefit plans and providing answers to their most challenging compensation issues. Additionally, our lawyers are well aware of the daily employee benefits challenges facing companies of all sizes and are capable of helping in-house lawyers and human resources personnel with the day-to-day advice and guidance necessary to properly administer employee benefits plans.

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May 2020
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