PPP v2.0 (3.5 months) - Owner compensation limit?

Technical topics regarding tax preparation.
#1
Wiles  
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I have a client (bar) that can borrow 3.5 months for the PPP second draw.

Are the owners still limited to 2019 compensation x 2.5/12? Or do we get 3.5/12 for them?
Last edited by Wiles on 19-Jan-2021 8:56pm, edited 1 time in total.
 

#2
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I would think that you get 3.5 months. Since they're lending 3.5 months not 2.5 months and the old owner limit was based on 2.5 months when the loan was 2.5 months.
 

#3
sjrcpa  
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The old owner limit was based on 8 weeks (max $100K annualized) when PPP first rolled out if my memory is correct.
 

#4
Wiles  
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But then changed to 2.5 months when PPP v1.1 changed the covered period to 24 weeks.
 

#5
sjrcpa  
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FWIW - the revised forgiveness applications released yesterday 1/19/21 say owner comp is limited to 2.5 months/$20,833.
 

#6
dave829  
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The multiplier is 2.5 months for most businesses. It’s 3.5 months for “NAICS 72 entities,” which includes “accommodations, food services and drinking places.” See pages 822-823 of the enrolled bill here:

https://www.congress.gov/bill/116th-con ... 3/text/enr
 


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