Reminder – Consider the Employee Retention Credit When Evaluating Whether To Repay a PPP Loan

May 15, 2020

By Richard Shapiro

As noted in our May 14 Alert, Paycheck Protection Program (“PPP”) borrowers with concerns as to the required good-faith certification now have until May 18, 2020 to repay their loans.

We have previously reported that an employer with a PPP loan is not eligible for the employee retention credit provided in the CARES Act..

The Small Business Administration, in its PPP Loans Frequently Asked Question 45, has stated that an employer that applied for a PPP loan, received payment and repays by the repayment deadline will be treated as though it had not received a covered loan for purposes of the employee retention credit and is therefore eligible for the credit if the employer otherwise qualifies for the credit. 

Accordingly, as the May 18 deadline approaches, the availability of the employer retention credit should be taken into account in evaluating whether or not to repay a PPP loan.

About Richard J. Shapiro

Richard Shapiro, Tax Director and member of EisnerAmper Financial Services Group, has over 35 years' experience in federal income taxation, including the taxation of financial instruments and transactions, both domestic and international.