PPP Loan Forgiveness

Please note, we are ALL being inundated daily with new information and clarification related to the Payroll Protection Program (PPP) Loan forgiveness calculation.  We will do our best to keep our business clients well informed and up-to-date.


LATEST NEWS!!  06/19/2020

New PPP Loan Forgiveness Applications Released

The U.S. Small Business Administration (SBA), in consultation with Treasury, released Wednesday a revised loan forgiveness application for the Paycheck Protection Program (PPP). The SBA also unveiled a new EZ application for forgiveness of PPP loans.

The applications reflect changes to the PPP made by the Paycheck Protection Flexibility Act of 2020, P.L. 116-142, which became law June 5; and included changes for loan forgiveness to 24 weeks from eight weeks, a reduction of the proportion of proceeds that must be spent on payroll costs to 60% from 75%, and the establishment of a safe harbor for businesses that have been unable to return to the level of business activity they had before the COVID-19 pandemic due to compliance with health and safety guidelines for slowing the spread of the virus.

The applications and instructions are available in the links below:

Application Highlights

    • Health insurance costs for S corporation owners cannot be included when calculating payroll costs; however, retirement costs for S corporation owners are eligible costs.
    • Safe harbors for excluding salary and hourly wage reductions and reductions in the number of employees (full-time equivalents) from loan forgiveness reductions can be applied as of the date the loan forgiveness application is submitted. Borrowers don’t have to wait until Dec. 31 to apply for forgiveness to use the safe harbors.
    • Borrowers that received loans before June 5 can choose between using the original eight-week covered period or the new 24-week covered period.

EZ Application Highlights

The EZ PPP Loan Forgiveness Application requires fewer calculations and less documentation than the full application. The EZ application can be used by borrowers that:

    • Are self-employed and have no employees;
    • 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%.

To get answers to more of your questions…

SBA Paycheck Protection Program FAQs

This series of frequently asked questions (FAQs) provides answers to questions the AICPA is hearing about the Paycheck Protection Program (PPP).


PPP Flexibility Act, Signed 06/05/2020

President Trump, TODAY, signed into law the Paycheck Protection Program Flexibility Act (PPPFA) in an attempt to address many concerns expressed by the small business community around the Paycheck Protection Program (PPP) loan forgiveness guidelines.

The main points of the legislation include:

  • The choice to extend the eight-week forgiveness period to 24 weeks, or keep the original eight-week period.
  • A drop to 60% from 75% for amount spend on payroll.
  • A 24-week period to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. This must be done by Dec. 31.  The previous deadline was June 30.
  • Two new exceptions allowing borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. The new bill allows borrowers to adjust because they could not find qualified employees or were unable to restore business operations to Feb. 15, 2020, levels due to COVID-19 related operating restrictions.
  • Five years to repay the loan instead of two. The interest rate remains at 1%.

Click here to read a more comprehensive overview of the Paycheck Protection Program Flexibility Act.