AICPA Applauds Additional Clarity in Treasury FAQ on Paycheck Protection Program

April 7, 2020

Key Clarifications in Line with AICPA Recommendations and Advocacy Points
 
Washington, D.C. (April 7, 2020) – The American Institute of CPAs (AICPA) praised the Treasury Department and Small Business Administration (SBA) for providing further clarity on the application process for the Paycheck Protection Program (PPP), the $349 billion small business relief program that is a key part of the CARES Act. Several key clarifications reflect recommendations the AICPA has made over the past week.

Treasury and the SBA posted an 18-point PPP FAQ with updated information last night. The AICPA and its small business funding coalition have been advocating for additional clarity on certain provisions of the PPP, and this FAQ is critically important to help facilitate the funding of small businesses.

“We’ve been working hard to drive a common understanding and approach around PPP implementation,” said Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s business and technology arm. “We thank Treasury and SBA for producing these clarifications and swiftly communicating this update.”

The FAQ aligns with many of the recommendations the AICPA made, such as:

  • Using the Gross Payroll approach for both loan application and forgiveness – the guidance also clarifies that employer FICA should not be included
  • The $100,000 salary limitation does not include healthcare, retirement benefits, and state and local taxes.
  • Applicants who use Professional Employer Organizations (PEOs) can provide payroll reports since they cannot produce individual entity payroll tax documents
  • Time period to calculate payroll costs for maximum loan amount

“These clarifications are going to make a significant impact in the total eligible funding amount available to small businesses,” said Mark Koziel, the AICPA’s executive vice president of firm services. “We know there are other outstanding issues and we will continue to drive recommendations and advocacy to produce further clarity.”

The AICPA plans to continue to provide updated recommendations and clarifications as it has been doing over the past week. The institute also has a general resource page to assist CPA firms on PPP issues.