PPP and first year s-corp

Forum|Forum|6 years ago
May 12, 2020
6 replies
30 views

Have 3 clients who were LLC's filing schedule C in 2019 who are S-corps in 2020.

All received PPP based on schedule C numbers (banks were fine with this). For payroll costs and owner replacement during the 8-week PPP period, should these be ideally run via payroll or done via the 8/52 owner replacement?

One is running payroll and two are just getting going (oh small practice life). Thoughts and friendly advice is appreciated.

ProSeries Professional

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sjrcpa

Level 15

I'd ask the banks. 😄 (I know this is useless).

As far as I know there is no answer to this not very unusual situation. Maybe SBA will cover it in forthcoming guidance.

The more I know the more I don’t know.

J

jw-rogersAuthor

Level 3

I have calls out to three bankers and will post what I hear back.

For the two who haven't run payroll, I'm considering putting them on payroll as they would be and then running payroll at the 8/52 basis the loan was calculated on.

For the client on payroll, I was going to run payroll as planned.

I'm going with the assumption that payroll/compensation needs to happen during the 8-week period as it would normally.

Appreciate your response!

qbteachmt

Level 15

You asked Twice. Please keep it to just this One Place. Thanks.

"For the two who haven't run payroll, I'm considering putting them on payroll"

You have to do this, as S corps. The Loans don't override IRS requirements.

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