Quote:
Originally Posted by buffalow
Ord27, that is not how I am reading the stipulation. In fact, I am checking with the lawyers again, but if your are a corporation I do not see anything that says upper management could not take it all up to $100K each, which would really defeat the purpose.
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That approach could totally screw you, I think. Forgiveness is measured against two standards, as I read it. There's an "average number of employees" standard in addition to the 75% on payroll costs standard.
Have your lawyers take a look at Section 1105(d)(2)(A) of the CARES Act:
(2) REDUCTION BASED ON REDUCTION IN NUMBER OF EMPLOYEES.—
(A) IN GENERAL.—The amount of loan forgiveness under this section shall be reduced by the percentage equal to the difference obtained by subtracting—
(i) the quotient obtained by dividing—
(I) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(II) (aa) the average number of full time equivalent employees per month employed by the eligible recipient during the period beginning on March 1, 2019 and ending on June 30, 2019; or
(bb) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on March 1, 2019 and ending on June 30, 2019; from
(ii) 1.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—The average number of full-time equivalent employees shall be determined by calculating the average number of employees for each pay period falling within a month.