On Wednesday, June 3, 2020, Bridget Hartnett, the Partner in Charge of the SobelCo Nonprofit & Social Services Practice and Mike LaForge, Partner and original founder of the nonprofit practice, were joined by moderator Brad Muniz, SobelCo partner in their presentation entitled, “PPP Loan Update for the Nonprofit Community.”

During this one hour session, they clarified some of the announcements from the Small Business Administration and the Treasury and then went on to review the PPP forgiveness process, honing in on the calculations necessary to complete the application.   

After presenting the four components Application, Schedule A, Schedule A Worksheet and Borrower Demographics Form, they shared some essential facts.

Payroll costs that are eligible when calculating forgiveness:

  • Payment for vacation, parental, family, medical, or sick leave.  Allowance for dismissal or separation.
  • Payment required for the provisions of group health care benefits, including insurance premiums.
  • Payment of any retirement benefit.
  • Payment of state or local tax assessed on the compensation of employees.

Payroll costs that are not eligible for calculating forgiveness:

  • Compensation in excess of $100,000. 
  • Compensation covered by other funding sources (Federal or State).
  • Taxes imposed or withheld under chapters 21 (FICA), 22(Railroad Retirement Tax), and 24(Income Tax Withholding) of the IRS code.
  • Compensation of employees whose principal place of residence is outside of the U.S.
  • Qualified sick and family leave for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act.

Understanding which non-payroll costs are eligible:

  • Covered mortgage obligations such as payments of interest (not including any prepayment or payment of principal) on any mortgage obligation on real or personal property incurred before February 15, 2020.
  • Covered rent obligations such as rent or lease payments pursuant to lease agreements for real or personal property in force before February 15, 2020.
  • Covered utility payments such as payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020.

After going line-by-line, the presenters reminded everyone that head count matters, especially because the primary objective of the Paycheck Protection Program is to provide financial support for employees. The goal for enacting this plan was simple: help provide the funds needed to keep people employed.     

To watch the webinar in its entirety, click here.