Q: What contributions for retirement benefits will be considered payroll costs that are eligible for loan forgiveness?
A: Generally, employer contributions for employee retirement benefits that are paid or incurred by the borrower during the Covered Period or Alternative Payroll Covered Period qualify as “payroll costs” eligible for loan forgiveness. The employer contributions for retirement benefits included in the loan forgiveness amount as payroll costs cannot include any retirement contributions deducted from employees’ pay or otherwise paid by employees. Forgiveness is not provided for employer contributions for retirement benefits accelerated from periods outside the Covered Period or Alternative Covered Period. Loan Forgiveness Payroll Costs FAQ 8 outlines the treatment of retirement benefits for owners, which are different from this general approach.
This Q&A was based on information contained in the Treasury Department’s October 13, 2020, version of “Paycheck Protection Program Loans, Frequently Asked Questions on PPP Loan Forgiveness,” which may be updated from time to time. This CARES Act / SBA / PPP Loan Forgiveness-related issuance may be found here: https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf