Treasury Clarifies Eligibility for Employee Retention Credit after Repayment of PPP Loan

On Wednesday evening, May 6, 2020, the Treasury released FAQ #45 in the Frequently Asked Questions under Program Rules. Question #45 clarifies that if an employer repays its PPP loan by the safe harbor deadline of May 14, 2020, they will be eligible for the Employee Retention Credit.

45. Question: Is an employer that repays its PPP loan by the safe harbor deadline (May 14, 2020) eligible for the Employee Retention Credit?
Answer: Yes. An employer that applied for a PPP loan, received payment, and repays the loan by the safe harbor deadline (May 14, 2020) will be treated as though the employer had not received a covered loan under the PPP for purposes of the Employee Retention Credit. Therefore, the employer will be eligible for the credit if the employer is otherwise an eligible employer for purposes of the credit.

Read the latest (5.6.2020) Frequently Asked Questions for the Paycheck Protection Program Loans. 

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