Many PPP borrowers have made the mistake of using 100% of their payroll to satisfy PPP forgiveness. Borrowers that also qualify for the Employee Retention Tax Credit should maximize the use of other qualified expenses to satisfy forgiveness related to their PPP Loan to allow the additional payroll to be utilized to maximize the benefits related to the Employee Retention Credit.
Example: If a borrower had a $100,000 PPP loan and used the allowed 60% of payroll to satisfy the forgiveness and 40% of other qualified expenses, the borrower would have an extra $40,000 of payroll available for the ERTC. If all $40,000 of wages qualify for the credit, it will result in an additional credit of $28,000. The borrower that uses 100% payroll to satisfy the PPP forgiveness calculation is potentially losing $28,000. The numbers will grow significantly with larger PPP loans.
Contact us today to find out how we can assist you with optimizing benefits related to these powerful economic stimulus programs.