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Scenario: You took a PPP loan, and your laid off employees are not returning to work and continuing to take unemployment.

As you know, forgiveness of the PPP is reliant on your paying enough payroll for a specific period after your loan is funded. So, of course you are worried now that your PPP will not be forgivable and will become a loan you to need to repay. 

Well, the SBA has thought of this, and for the payroll total that would have been paid to any underhanded employee doing this to you, that amount can reduce the amount that you need to reflect as payroll to qualify for forgiveness.

There are few important things that you need to do:

  1. Notify all former employees in writing that their jobs are available and that they need to return to work immediately.
  2. For those that don’t return. 
    1. Document what their average weekly wages would have been had they returned.
    2. Notify your state unemployment by writing to them and documenting the workers’ full names, social security numbers, and the day that they could have returned to work, but chose not to. 
    3. All unemployment divisions would see this as fraud and many will prosecute the perpetrators.
  3. Maintain these detailed records in a “PPP Loan Forgiveness Folder”, so later I can help you get your loan forgiven, including these non-returning employees estimated payroll figures for the period.

Questions? Concerns? Call me on (732) 673-0510.

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Click here to request a consultation or ask me a question.

Please reach out to me without hesitation with any tax, business or accounting question, and to schedule a consultation.

Tax Laws are complex.

It is very easy to make mistakes that can incur penalties.

Do you have a Tax, Accounting or Business Question?

Call Me Immediately. (732) 673-0510.

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ignoring your Phone Calls and Emails?

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Remember,

“If We Aren’t Working For You, Then You Aren’t Working At Your Best”

Chris Whalen, CPA
(732) 673-0510
81 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com

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