Department of Treasury Final PPP FAQ

Update from Corporate Solutions

We are very happy to report that the language we have been seeking, to clarify that lenders do not need 941s or other tax documents from a PEO client in order to qualify for a Payroll Protection Program (PPP) loan, has been added to the Treasury website late last evening, April 6, 2020. We have attached the complete document for you.  We have provided the link to the document as well:   https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequenty-Asked-Questions.pdf

See question 10 –

Question: What if an eligible borrower contracts with a third-party payer such as a payroll provider or a Professional Employer Organization (PEO) to process payroll and report payroll taxes?

Answer: SBA recognizes that eligible borrowers that use PEOs or similar payroll providers are required under some state registration laws to report wage and other data on the Employer Identification Number (EIN) of the PEO or other payroll provider. In these cases, payroll documentation provided by the payroll provider that indicates the amount of wages and payroll taxes reported to the IRS by the payroll provider for the borrower’s employees will be considered acceptable PPP loan payroll documentation. Relevant information from a Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers, attached to the PEO’s or other payroll provider’s Form 941, Employer’s Quarterly Federal Tax Return, should be used if it is available; otherwise, the eligible borrower should obtain a statement from the payroll provider documenting the amount of wages and payroll taxes. In addition, employees of the eligible borrower will not be considered employees of the eligible borrower’s payroll provider or PEO.

We at CSI would like to thank the NAPEO, (our industry lobby organization)  members and staff who worked tirelessly with the SBA, Department of Labor and the Department of Treasury to make sure all PEO clients had the language for lenders to understand the PEO and client relationship.

As always, if you have any questions please do not hesitate to contact us.  We will continue to provide our valuable clients any and all new information that is released.   Please stay safe and healthy.

Department of Treasury Final PPP FAQ