Key Clarifications in Line with AICPA Recommendations and Advocacy Points
WASHINGTON, D.C.–(BUSINESS WIRE)–The American Institute of CPAs (AICPA) praised the Treasury Department and Small Business Administration (SBA) for providing further clarity on the application process for the Paycheck Protection Program (PPP), the $349 billion small business relief program that is a key part of the CARES Act. Several key clarifications reflect recommendations the AICPA has made over the past week.
Treasury and the SBA posted an 18-point PPP FAQ with updated information last night. The AICPA and its small business funding coalition have been advocating for additional clarity on certain provisions of the PPP, and this FAQ is critically important to help facilitate the funding of small businesses.
“We’ve been working hard to drive a common understanding and approach around PPP implementation,” said Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s business and technology arm. “We thank Treasury and SBA for producing these clarifications and swiftly communicating this update.”
The FAQ aligns with many of the recommendations the AICPA made, such as:
- Using the Gross Payroll approach for both loan application and forgiveness – the guidance also clarifies that employer FICA should not be included
- The $100,000 salary limitation does not include healthcare, retirement benefits, and state and local taxes.
- Applicants who use Professional Employer Organizations (PEOs) can provide payroll reports since they cannot produce individual entity payroll tax documents
- Time period to calculate payroll costs for maximum loan amount
“These clarifications are going to make a significant impact in the total eligible funding amount available to small businesses,” said Mark Koziel, the AICPA’s executive vice president of firm services. “We know there are other outstanding issues and we will continue to drive recommendations and advocacy to produce further clarity.”
The AICPA plans to continue to provide updated recommendations and clarifications as it has been doing over the past week. The institute also has a general resource page to assist CPA firms on PPP issues.
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with more than 429,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for its members and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives professional competency development to advance the vitality, relevance and quality of the profession.
About the Association of International Certified Professional Accountants
The Association of International Certified Professional Accountants (the Association) is the most influential body of professional accountants, combining the strengths of the American Institute of CPAs (AICPA) and The Chartered Institute of Management Accountants (CIMA) to power opportunity, trust and prosperity for people, businesses and economies worldwide. It represents 657,000 members and students across 179 countries and territories in public and management accounting and advocates for the public interest and business sustainability on current and emerging issues. With broad reach, rigor and resources, the Association advances the reputation, employability and quality of CPAs, CGMAs and accounting and finance professionals globally.