PPP and Profit sharing contributions
Can a company make a profit sharing contribution for year-end 2019 with funds they received from the PPP? They would normally be making their 2019 year end contribution at this time of year so it does fall within the normal 8-week use window and it is a payroll cost.
Permalink Submitted by William Tuttle on Thu, 2020-04-30 16:28
However, profit sharing is based on compensation, but is not really a payroll cost. The timing of employer profit sharing is entirely discretionary as long as it is done by the businesses tax filing deadline including extensions. You may include it as part of a payroll “stub” or other information, but it is total separate from payroll. It is not reported on the employee’s W-2 and comes from employer funds independent of the employee’s compensation.