SBA Releases New PPP Forgiveness Forms

On June 17, the Small Business Administration released updated Paycheck Protection Program (PPP) loan forgiveness application forms.

The new forms are shorter, in an effort to streamline the forgiveness process.

The forms adhere to the new guidelines, which include:

  1. If a business chooses the 24-week covered period, the maximum forgiveness per owner-employee is $20,833. If a business chooses the 8-week covered period, the maximum forgiveness remains $15,385.
  2. The Safe Harbor definitions have been expanded for full-time equivalent (FTE) requirements.
  3. If a borrower is required to fill out Schedule A, the borrower should use the Safe Harbor FTE date of either the application date or December 31, 2020, whichever is earlier.
  4. There are two application forms for forgiveness:
    1. Form 3508EZ is for businesses that 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. This form is a simplified forgiveness application that does not require Schedule A.
    2. Revised Form OMB Control Number 3245-0407 is for businesses that had a reduction in number of employees or average paid hours between January 1, 2020 and the end of the covered period.  Schedule A is required.
  5. The 401(k) match incurred in the covered period can be included as an allowable payroll cost.
  6. For 100% forgiveness, payroll costs must be a least 60% of a business’ forgiveness request.

PBO Advisory Group is planning a webinar to review the new forms and guidelines. We will be emailing invitations shortly. In the meantime, if you have any questions, please feel free to contact us.