Q: “Should we include the FTE status of owner-employees in the forgiveness calculations? If the company had 10 FTEs (1 of the 10 was an owner) in the reference period and the company has 8 FTEs (1 of the 8 is an owner) in the covered period, does the owner get included in the reduction calculations?”
June 25, 2020
Authored by Aria Eckersley
No. When determining FTEs, you do not include owner-employees. So in the example provided, there would only be 9 FTEs in the reference period and 7 FTEs in the covered period for the forgiveness calculations related to FTE reductions.
Although it’s a lot of information to dissect, we recommend referencing back to the Forgiveness Application Instructions often (link here) as you’re putting together your forgiveness application materials. This instruction sheet provides more detailed information about what should be included in each application line with more explanations than what’s included on the application itself. We provided a short guide on the new forgiveness application process here if you’re looking for an introduction to the concepts before diving into the application and instructions.