SBA Issues PPP Guidance on Laid-Off Employees Who Refuse to be Rehired
RBSK Payroll understands these changes to mean that:
- Employees are receiving an extra $600/week under the CARES Act. For many employees, this extra $600 means they're making more on unemployment than if they returned to work, so they may not want to go back to work for less money.
- Employees who refuse to be rehired risk losing their unemployment compensation.
- Businesses can exclude laid-off employees from the loan forgiveness reduction calculation if the employee refuses to be rehired.
Some employees have turned down offers to be rehired for the same jobs for a variety of reasons, one of them being that they are making more money in unemployment benefits than they do in pay at their jobs because the CARES Act temporarily provides an additional $600 per week to people who have been approved by their state for unemployment insurance.
Possible Changes for PPP Recipients
The PPP was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). An eligible recipient of a covered loan can receive forgiveness of indebtedness on the loan in an amount equal to the sum of payments made for the following expenses during the eight-week covered period beginning on the covered loan’s origination date:
- Payroll costs,
- Any payment of interest on any covered mortgage obligation,
- Any payment on any covered rent obligation,
- Any covered utility payment.
New legislation introduced in the Senate on Tuesday, May 5 would overrule an IRS notice and clarify that ordinary expenses funded by Paycheck Protection Program (PPP) loans are deductible by taxpayers. The bill is currently in the Senate Finance Committee and is supported by the AICPA. RBSK will provide additional information as it becomes available.
This information has been provided by The Journal of Accountancy and has been used with their permission.
For more information visit our COVID-19 Guidance Center.
Tips of where to get your information about the virus
Centers for Disease Control and Prevention CDC.gov
Indiana State Department of Health News ISDH.in.gov
World Health Organization WHO.int
Where to find local updates about the virus
Decatur County Health Department Facebook Page
Bartholomew County Health Department Facebook Page
Ripley County Health Department Facebook Page
Franklin County Health Department Facebook Page
North Vernon Plain Dealer & Sun Homepage
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Please call us at 812-222-1559 if you have any questions