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Just when you think you have it all understood, the SBA issues an update with answers to frequently asked questions … and things change.

  • In the SBA’s set of FAQs dated April 6, Q&A #7 clarifies the $100,000-per -employee limitation. It states that the $100,000 applies only to cash compensation. It does not apply to non-cash benefits including: employer contributions for group health insurance, retirement plans, or payments of state and local taxes. Editor’s Note: We assume it also does not apply to income tax withholding.
  • Contrary to some thoughts, employers who pay their employee using a PEO (Professional Employer Organization) may claim those employees’ wages as part of the PPP requested loan amount.
  • According to their industry, some businesses that might otherwise have more than 500 employees may qualify as a small business concern. Check the SBA rules in Section 3 of the SBA act.
  • PPP loans do cover sick pay, as well as employee vacation, parental, family, and other medical leave. Remember that you cannot double dip those payments on the other IRS programs, but you should include them in your calculation.
  • The FAQs stress again and again that payments to independent contractors are not to be included in your calculations.
  • If you filed for your PPP under the old rules, you need not reapply. If your application has not been processed, you may check with your bank to request modification of that amount. Beware, though, of being sent to the back of the line. Funding is capped, so prioritize protecting your place in line.


These items might significantly impact your application. Call us, or your advisors, with questions. In the meantime, we will continue to keep you updated as things unfold.

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