Jump to content
ATX Community

are family members on the payroll ok for PPP


schirallicpa

Recommended Posts

In my neck of the woods, hiring your children is sometimes the only people you can get to work!

If an employer hires his child (over 18) or other family member, and that person is getting a legitimate paycheck and W2, is it okay for purposes of loan forgiveness, or does this need to be "arms length"?

Link to comment
Share on other sites

You don't have to hire anyone new, family or not, for forgiveness. You just have to keep the same number of FTEs within allowable ranges and salaries. If employees choose not to return, just confirm that; or if you can't open up fully (a restaurant allowed only 50% seating, for example), you don't need all your employees for forgiveness. You can employ family, for the loan application or for forgiveness. Just don't go randomly raising owner salaries with PPP funds.

Link to comment
Share on other sites

Your client can hire new employees. He may have employees who choose not to return. He doesn't have to have the same exact employees; but if he does, don''t cut their salaries without a business reason (can't open fully, etc.) Work through the forgiveness application and instructions, even though it might change again. See the safe harbors, such as what percentage drop in FTE &/or salary won't reduce forgiveness, alternate comparison dates, etc. Does your client have other allowable expenses to make up to 40% of the loan? Compare a small drop in forgiveness/loan at 1% for 5 years vs hiring an unnecessary employee.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...