Paycheck Protection Program - Loan Forgiveness
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
• Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
• Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the 24-week period after receiving their PPP loan
• Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
• Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
• Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined
PPP Loan Forgiveness Application Form 3508EZ Instructions
You can apply for forgiveness of your Paycheck Protection Program loan using the SBA form 3508EZ if at least one of the statements below applies:
- The borrower is self-employed, an independent contractor or sole proprietor.
- The borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the Covered Period and did not reduce the number of employees or the average paid hours of employees.
- The borrower did not reduce annual salary or hourly wages of any employee by more than 25% during the Covered Period and was unable to operate during the Covered Period at the same level of business as before.
PPP Loan Forgiveness Application Form 3508S Instructions
(For borrowers with loan amounts of $50,000 or less)
On October 8, 2020 the US Treasury came out with a simpler PPP loan forgiveness application for loans of $50,000 or less. This Forgiveness Application Form 3508S has removed the calculations and inputs borrower were required to provide on past forms. Borrowers still need to provide documentary evidence of their payroll, utility, rent and mortgage interest expenses exceeding the amount of their loan, but borrowers do not need to reconcile these numbers on the application and instead provide representation and certifications that they used the money for authorized purposes.