Updated PPP Loan Forgiveness Guide: New Rules

We anticipate that it will likely take a minimum of 30 days to fully complete the request. The timeframe will depend on our evaluation, your responsiveness during each step of the process, and applicable SBA requirements. This form may be used to apply for forgiveness of a First Draw or Second Draw Loan, however, each loan must use a separate Forgiveness Application form (i.e., Borrowers who have both a First Draw and Second Draw Loan of $150,000 or under cannot combine them on one Forgiveness Application form). Please note that Pursuit is not able to provide in-depth business advice on loan forgiveness. We recommend that you speak with your accountant, business advisor, or seek assistance from a local Small Business Development Center. Please check with sba.gov for the latest guidance on your forgiveness application window.

You can also view the latest versions of the PPP loan forgiveness applications, Form 3508S, Form 3508EZ, and Form 3508 on the SBA site. Owner compensation for a 24-week covered period is capped $20,833 (not to exceed 2.5 months of compensation in the year that was used to calculate the loan amount (2019 or 2020) across all businesses in which they have an ownership stake – the maximums are lower for periods of less than 24 weeks. Note that owner-employees with less than 5% ownership stake in C-or S-corps are not subject to these caps, but are still subject https://adprun.net/small-business-accounting-101-12-steps-for-basics/ to the general employee limitation of $46,154 per employee during a 24-week covered period – the maximums are lower for periods of less than 24 weeks. The total amount of cash compensation eligible for forgiveness may not exceed a pro-rated annual salary of $100,000. This means the maximum you can claim for cash compensation is $46,154 for any individual employee during a 24-week covered period – the maximums are lower for periods of less than 24 weeks. The covered period is the period in which loan funds must be used to qualify for loan forgiveness.

PPP lender information

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. SBA has determined that this rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various layers of government. Therefore, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment.

Now that funds have been depleted, borrowers need to take action to determine if their loans are eligible for forgiveness, how to apply for forgiveness, and what to do if all or part of the loan needs to be repaid. In this post, we’re going to address PPP loan forgiveness, including what expenses qualify, what to do if you don’t qualify, and how to cruise through the application process. Then track the way you spend your PPP funds over the eight to 24 weeks following your receipt of the funds. Be sure for each expense to document the date, vendor information, and category as it pertains to PPP forgiveness approved expenses (e.g., payroll, utilities, etc.). This will also help you understand if you’re spending the loan in a way that sets you up to be forgiven. If your loan is less than $150,000, you will not be required to submit supporting documentation with your forgiveness application.

Prepare and submit your PPP loan forgiveness application.

Here, you can find the most up-to-date information on PPP loan forgiveness. If you have questions that are not answered here or in our FAQ, please email [email protected]. The pay Employee A received during the covered period of $15 per hour is $3.75 less than $18.75. The Small Business Administration’s Paycheck Protection Program doled out $790.9 billion in small-business loans to Quicken Estate and Trust Fiduciary Accounting Templates FAQs ACTEC struggling businesses between April 2020 and May 31, 2021, when the program closed. Nearly $661.5 billion of that loaned amount has been forgiven, as of January 2, 2022. Generally, there would be no exception to the imposition of the underpayment of estimated tax, late payment penalties, or substantial underpayment penalties due to a misunderstanding of the requirements of the law.

• This includes but is not limited to payroll records, bank statements, receipts, financial statements, and tax forms.
• Click here to read our full review for free and apply in just 2 minutes.
• However, you’re still required to retain employment records for four years and other related documents for three years.
• The latest guidance from the SBA states for first draw PPP loan forgiveness applications using the S form, documentation does not need to be uploaded, however, you are required to retain all records relating to your PPP loan and may be required to submit such documentation to the SBA, upon request.
• For example, if an employee was paid for 30 hours per week on average during the covered period, the employee could be considered to be an FTE employee of 0.75.
• The amount of loan forgiveness that a borrower may receive cannot exceed the principal amount of the PPP loan.

You did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the covered period. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if you were unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020 (or for a PPP loan made after December 27, 2020, the last day of the Covered Period). Also, ignore reductions in an employee’s hours that you offered to restore and the employee refused).