Just before the weekend, the SBA added four additional questions (numbers 32-35 for those keeping count) to the Paycheck Protection Program Loans Frequently Asked Questions document on the SBA CARES Act website.[1]  The four questions and answers deal with housing allowances, how to determine if an employee’s principal place of residence is in the United States and how the PPP program applies to agriculture.

This is the first addition to this list on the website since the SBA published an interim final rule allowing for guidance to appear on the SBA’s website.

Housing Stipends or Allowances

Some employees are paid a housing stipend or allowance, which may or may not be taxable to the employee (for instance, ministers’ housing allowances generally are not taxable).  The SBA tells us that such allowances are part of cash compensation—so it counts, but it is part of the compensation subject to the $100,000 cap.

32. Question: Does the cost of a housing stipend or allowance provided to an employee as part of compensation count toward payroll costs?

Answer: Yes. Payroll costs includes all cash compensation paid to employees, subject to the $100,000 annual compensation per employee limitation.

Employee’s Principal Residence in the United States

Another added question provides a resource for employers to consult in determining if an employee’s principal place of residence is in the United States, a requirement to count that employee’s compensation as a payroll cost for the Payroll Protection Program loans:

33. Question: Is there existing guidance to help PPP applicants and lenders determine whether an individual employee’s principal place of residence is in the United States?

Answer: PPP applicants and lenders may consider IRS regulations (26 CFR § 1.121- 1(b)(2)) when determining whether an individual employee’s principal place of residence is in the United States.

Issues for Agriculture

The final two questions deal with the availability of the PPP loans for various parties involved in agriculture.  The first question outlines how agricultural producers, farmers and ranchers fit into the program:

34. Question: Are agricultural producers, farmers, and ranchers eligible for PPP loans?

Answer: Yes. Agricultural producers, farmers, and ranchers are eligible for PPP loans if: (i) the business has 500 or fewer employees, or (ii) the business fits within the revenue-based sized standard, which is average annual receipts of $1 million.

Additionally, agricultural producers, farmers, and ranchers can qualify for PPP loans as a small business concern if their business meets SBA’s “alternative size standard.” The “alternative size standard” is currently: (1) maximum net worth of the business is not more than $15 million, and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.

For all of these criteria, the applicant must include its affiliates in its calculations.

The question concludes with a link to the Applicable Affiliation Rules for the PPP at https://www.sba.gov/document/support--affiliation-rules-paycheck-protection-program.

The final question discusses how the program applies to cooperatives, both agricultural and other:

35. Question: Are agricultural and other forms of cooperatives eligible to receive PPP loans?

Answer: As long as other PPP eligibility requirements are met, small agricultural cooperatives and other cooperatives may receive PPP loans.

[1] “Paycheck Protection Program Loans Frequently Asked Questions,” April 24, 2020 version, https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf (retrieved April 24, 2020)