What Are Utilities Costs for the PPP?

If you want to get your PPP loan forgiven, at least 60% of the funds must be used on payroll expenses and the remainder on rent or lease payments, mortgage interest, and utilities.

But the definition of “utilities” for the purpose of the PPP is actually more robust than what is considered a utility for your tax return.

What is a utility for the PPP?

The following are all considered forgivable utilities expenses for the PPP:

  • Electricity
  • Water bill
  • Gas
  • Sewage
  • Telephone (cell phone and landline)
  • Internet bill
  • Transportation costs

Traditionally, “utilities” normally means electricity, water, gas, and sewage only. But as you can see, the PPP adds the additional categories of telephone, internet, and transportation costs.

What transportation costs are eligible for forgiveness?

The SBA has yet to release guidance on which expenses are included under the category of “transportation.” Currently, our understanding is that eligible expenses for loan forgiveness must fall under transportation utility fees assessed by state and local governments. These are fees paid by businesses based on their use of the trasportation system.

What conditions must be met for a utility cost to be eligible for forgiveness?

All agreements must have been in place prior to February 15th, 2020. Any agreements that began after February 15 would not be eligible for forgiveness.

More PPP resources

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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