Can I collect a PPP Loan and Unemployment?

J

JonBealeNYC

New Member
Jurisdiction
New York
That question is not was simple as it sounds. I am a single owner C Corp. I am only working in my business 2 days a week now as a result of Covid. Hence I am collecting partial unemployment. I just received a Payroll Protection Program loan. Remember I am the only employee. Rather than drop unemployment and pay myself a full-time salary from that loan for 8 weeks I would much rather just stay on unemployment, pay myself a part time salary from the PPP funds and use the balance of those funds for my store rent which I don't have right now due to no business. That would make the most economical. Is this a legal approach or do I need to stop UI. Thanks
 
You need to be talking to somebody at NY's UI office to have your individual situation reviewed and addressed.

I'm sure they will want chapter and verse of your company financials.
 
adjusterjack said:
You need to be talking to somebody at NY's UI office to have your individual situation reviewed and addressed.

I'm sure they will want chapter and verse of your company financials.
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Chapter and Verse is right. After receiving UI for 4 weeks (prior yo PPP) I received a questionnaire asking for detailed information about business operations and 3 years of corporate tax returns. Not sure why they ask for this 4 weeks into a claim, unless they are just backed up to pandemic. Looks like they want to make sure I really am only working 2 days a week. Tempted to just end UI at this point and go with PPP.
 
JonBealeNYC said:
Chapter and Verse is right. After receiving UI for 4 weeks (prior yo PPP) I received a questionnaire asking for detailed information about business operations and 3 years of corporate tax returns. Not sure why they ask for this 4 weeks into a claim, unless they are just backed up to pandemic. Looks like they want to make sure I really am only working 2 days a week. Tempted to just end UI at this point and go with PPP.
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Ending UI won't stop the investigation, nor will it stop any penalties that may be applied if they find some sort of impropriety.
 
I would advise anyone NOT to use government PPP loan funds to pay rent for the business and salary to himself/herself, while receiving UI compensation.

I would advise anyone that may have done some (or ALL) of the above to speak with a licensed attorney in her/his jurisdiction ASAP.
 
If you want the payroll part forgiven, it is my understanding you have to keep it in ratio with the other expenses 3/4 payroll and 1/4 expenses. If you limit your payroll, you will be majorly limiting your expense availability.... that said, I agree with the others that you should NOT double dip or claim the same time periods on both benefits. Personally there is no way I'd risk what you are wanting/trying to do.
 
hrforme said:
If you want the payroll part forgiven, it is my understanding you have to keep it in ratio with the other expenses 3/4 payroll and 1/4 expenses. If you limit your payroll, you will be majorly limiting your expense availability.... that said, I agree with the others that you should NOT double dip or claim the same time periods on both benefits. Personally there is no way I'd risk what you are wanting/trying to do.
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Thanks everyone. I wasn't sure what to do which was why I asked. I got conflicting answers from everyone, even my CPA. This is a corporation and the business is a small retail store. I would rather use the loan for allowable expenses such as rent (which is allowable even if 100% is used) and continue to work part time, otherwise I probably won't have a business in a couple of months. However, I can understand how the beaurocrats at the DOL could question that.
I will stop claiming benefits for the next 8 weeks. Hopefully we will be able to reopen next month.
 
JonBealeNYC said:
Thanks everyone. I wasn't sure what to do which was why I asked. I got conflicting answers from everyone, even my CPA. This is a corporation and the business is a small retail store. I would rather use the loan for allowable expenses such as rent (which is allowable even if 100% is used) and continue to work part time, otherwise I probably won't have a business in a couple of months. However, I can understand how the beaurocrats at the DOL could question that.
I will stop claiming benefits for the next 8 weeks. Hopefully we will be able to reopen next month.
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If you use the PPP money for expenses other than payroll, it's going to turn in to a loan. If you use it for payroll (with various ratios applied), then a large part of it will turn in to a grant. Why would you want not use it for payroll as much as possible? Heck, even if you paid yourself in full and then personally paid the rent, you would likely be better off. Talk to your CPA about that.
 
PayrollHRGuy said:
Keep in mind it will be a loan that has to be repaid if used 100% for rent.
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Yes I know. And I didn't mind that at the interest rate they are imposing. But as everyone said above, it sounds like I would end up doing a lot of explaining and documenting if I went that route. Probably not worth the hassle.
 
JonBealeNYC said:
Yes I know. And I didn't mind that at the interest rate they are imposing. But as everyone said above, it sounds like I would end up doing a lot of explaining and documenting if I went that route. Probably not worth the hassle.
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Nobody said that...
 

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