Good news for guaranteed payments

professional profile

May 14, 2020

by a professional from University of Illinois at Urbana-Champaign - College of Business in 475 Half Day Rd, Lincolnshire, IL 60069, USA

With guidance on guaranteed payments late to arrive, many partners did not include these amounts in their PPP loan applications. Today, the SBA released additional information that may be good news for your partnership. https://bit.ly/2y0G1fB

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Reply by a professional
from University of Illinois at Urbana in 475 Half Day Rd, Lincolnshire, IL 60069, USA
^redacted‌ Specific guidance on how the forgiveness calculations are still to be issued by Treasury, but in their document on how to calculate loan balances they state partner guaranteed payments are included in the calculation (Question #4 of https://home.treasury.gov/system/files/136/How-to-Calculate-Loan-Amounts.pdf). It would follow that costs measured on the same basis will be qualifying for the forgiveness application.
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Reply by a professional
from University of Illinois at Urbana in 475 Half Day Rd, Lincolnshire, IL 60069, USA
^redacted‌ Treasury hasn't given any guidance on whether S-corporation income in excess of what is declared as salary can be included. I suspect their position would be it does not count as that income is not subject to self-employment taxes or payroll taxes. The only portion of partnership income that counts for PPP purposes are guaranteed payments which are subject to SE taxes.
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