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At this point, all banks should be accepting forgiveness applications. So, as soon as you feel you have spent your PPP on all appropriate and forgivable items, contact your bank to get your forgivess process started.
UPDATED PPP FORGIVENESS RULES FOR NEW LEGISLATION
- Extends the covered period (date at which the access to PPP funds will end) to December 31, 2020, from June 30, 2020 (of note, there is approximately $130 billion remaining to be allocated under authorized PPP funds.)
- The 8 week period applicable to forgiveness has been extended to 24 weeks.
- This is important as now 100% of the PPP loan given to a sole proprietor with no other payroll can be forgiven!
- The minimum 75% rule spent towards payroll costs to be eligible for full forgiveness has been decreased to 60%.
- Extends the deferral period (P&I) from 6 months to a date that is the earlier of the date of remittance of forgiveness to the lender or 10 months (in other words, a customized deferral period….could have done without that one.)
There are two PPP Loan Forgiveness Applications. There is a 3 page EZ form and the original longer form.
The PPP forgiveness EZ form is designed for businesses that meet AT LEAST ONE of the following criteria:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
The instructions for form 3508EZ elaborate on these points. Please take the time to read these instructions thoroughly. You must qualify under one of the following three categories. If you do, then you may use this simplified form to apply for forgiveness with your lender. If you do not, then you must use the standard forgiveness form.
Again you must meet AT LEAST ONE of the above criteria in order to use Form 3508 EZ.
Click here to download the EZ PPP Loan Forgiveness Application
Click here to download the Long Form PPP Loan Forgiveness Application
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Chris Whalen, CPA
(732) 673-0510
81 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com
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