On May 22nd, the SBA and Treasury Department answered several questions that had lingered regarding what kinds of compensation are forgivable under the PPP program. One important unanswered question was the extent that commissions or bonuses paid by a borrower during the covered period were eligible for loan forgiveness. In an Interim Rule released on May 22, 2020, the SBA and Treasury Department stated that if an employee’s total compensation does not exceed $100,000 on an annualized basis, the employee’s commission pay and bonuses are eligible for loan forgiveness because they constitute a supplement to salary or wages, and are thus a similar form of compensation. This is an important piece of information for PPP borrowers to consider as they make their plans to maximize the amount of forgiveness. Borrowers should feel free to reach out to Kemp Klein for assistance with this or any other matter concerning PPP loan forgiveness.
Return to COVID-19 Business Alerts