Additional Guidance for Seasonal Employers
Seasonal employers were required to determine their payroll costs for the Paycheck Protection Program (PPP) based on either:
- Average monthly payroll costs for the twelve weeks beginning February 15, 2019, or
- Average monthly payroll costs for the period March 1, 2019 through June 30, 2019.
Seasonal employers now have the option to use either of the above periods to calculate payroll costs or they can choose to use any consecutive 12 week period between May 1, 2019 and September 15, 2019.
This change means that if your payroll costs are much higher in the summer time to harvest your crops you will qualify for a larger PPP loan.
However, until we get final guidance on whether you need to spend at least 75% on labor costs to get any forgiveness, you may want to tailor your loan request to the amount that you feel comfortable spending during the 8 week forgiveness period.
Until we get written guidance from Treasury on the forgiveness calculations, it is extremely difficult to determine your optimum loan amount. This option makes it even more difficult.
This also appears to be a case of writing the rules to update the law. This option was not in the CARES Act.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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