PPP loan

Hi, 

The ppp loans cover retirement plan contributions. While it is highly unlikely, does this by any chance include DB Plan contributions? Thank you.

I'm seeing various opinions on this.  From a conservative standpoint, some are saying "no".  Mainly because of the timing to fund them (as well as profit sharing, safe harbor nonelective, etc.)  A match is directly tied to payroll, so I think that is acceptable.  However, the language of the Act says "payment of ANY retirement benefit" (emphasis added).  That's where others are saying that limiting it to match is too conservative.

Applying for these loans is available starting today (4/3) for small businesses and sole proprietors.  I imagine they could discuss it with their SBA lender.  

Here is a recent article published by ASPPA discussing what types of plan contributions might be payable with PPP loans:

https://www.asppa.org/news/retirement-contributions-and-paycheck-protection-program

Text from instructions for the loan is pasted below.  I'm not sure if it was for a particular lender or generic from the gov't.  I had highlighted "match" b/c I don't think it is to be taken literally.  Note that any salary (and presumably retirement plan contributions) is subtracted.  We are generally providing actual contributions made, regardless of the year they are "for."  I wouldn't lose sleep over any of this.  "Close enough for government work" definitely applies IMO.

(4) Retirement plan funding the employer made for employees for the period of January 1, 2019 to current for the following types of plans if applicable (will need funding noted by employee):
              Profit sharing 401(k) plans, Cash balance plans, SIMPLE and SEP IRAs
             
              If your plan administration has been completed, please send a copy of your Form 5500 for 2019 and report showing employer match by employee

              Employees’ own 401(k) salary deferrals won’t count for these purposes

1 hour ago, Bird said:

Text from instructions for the loan is pasted below.  I'm not sure if it was for a particular lender or generic from the gov't.  I had highlighted "match" b/c I don't think it is to be taken literally.  Note that any salary (and presumably retirement plan contributions) is subtracted.  We are generally providing actual contributions made, regardless of the year they are "for."  I wouldn't lose sleep over any of this.  "Close enough for government work" definitely applies IMO.

(4) Retirement plan funding the employer made for employees for the period of January 1, 2019 to current for the following types of plans if applicable (will need funding noted by employee):
              Profit sharing 401(k) plans, Cash balance plans, SIMPLE and SEP IRAs
             
              If your plan administration has been completed, please send a copy of your Form 5500 for 2019 and report showing employer match by employee

              Employees’ own 401(k) salary deferrals won’t count for these purposes

What document are you quoting from?

Yes, please cite the document for this.  I have been working on PPP related stuff most of the day and do not see this in any government guidance.   From the instructions to SBA Form 2483:

With respect to “purpose of the loan,” payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement;...

On 4/3/2020 at 2:29 PM, Mike Preston said:

What document are you quoting from?

That was text of instructions forwarded by an accountant.  I didn't see the actual instructions.  The worksheet itself has Innovative Financing Solutions in the corner, and they are apparently some sort of intermediary.  I believe the instructions came from them.

https://www.innovativefinancingsolutions.net/