Only 40% of your PPP loan can be used for expenses other than payroll for certain business structures. If you used more than 40% on non-payroll expenses, your forgiveness amount will be reduced by the percentage of the loan you used on ineligible expenses. Benefits include a simplified application and no supporting documentation required in most cases. All borrowers, regardless of PPP loan amount, must submit an application in order to request loan forgiveness. You should consult your attorney to understand the potential ramifications and additional requirements of completing the sale of your business while you have an open PPP loan. If you sell your business before completing the loan forgiveness process, you may jeopardize your forgiveness claim.

Documents may include payroll tax filings and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported or that will be reported to the relevant state. On page four of the forgiveness application, you’ll initial and sign to certify that you used your PPP loan as per the required guidelines. You’ll also certify that your payroll and tax documentation is accurate, and that the SBA can request more supporting information from you if necessary. There is an exception, which we’ll discuss in detail below, which is an “alternative payroll covered period.” You can utilize this option to better align your existing payroll schedule with the disbursement of your loan. For example, if you receive your loan on April 20, but your next pay day isn’t until April 25, you can elect to begin your covered period on April 25 instead. Borrowers that elect to use a ten-week covered period, the cap is ten weeks’ worth (10/52) of 2019 or 2020 compensation (approximately 19.23 percent) or $19,231 per individual, whichever is less, in total across all businesses. Please choose a covered period of at least 11 weeks if you are self-employed or if you used your Schedule C to apply for your PPP loan to ensure you receive full forgiveness.

What expenses must borrowers include on their forgiveness applications?

Enter the 24-week equivalent of the difference in salary by multiplying by 24/52 (use 8/52 if you are using an 8-week Covered Period). Enter the number of actual employees, not Full-Time Equivalents . Use the same information as on your PPP application unless the information has changed. Once you start your online https://quickbooks-payroll.org/ application, you’ll be able to save and come back to it as you prepare it. Consider using this form if you do not meet the eligibility conditions for either of the other forms. Form 3508EZ. Consider using this form if you are not eligible for Form 3508S, and you meet one of the two eligibility conditions.

Requests for additional information and status updates will be sent to the email address on file. To verify the other forgivable but non-payroll costs, borrowers should submit proof of payments of business mortgage interest payments, business rent or lease payments, and/or business utility payments. Using responses from the Schedule A Worksheet, information on non-cash compensation payroll costs during the covered period, information on compensation paid to owner-employees/self-employed individual/general partners, fill out the Schedule A form. The deadline for loan forgiveness applications is based on when you originally applied for a loan and when it was funded. This determines the maturity date as well as the “covered period,” which is anywhere from eight to 24 weeks from the date of initial loan disbursement. All payments are deferred until you receive a decision on your loan forgiveness application. If your forgiveness application was submitted after your deferral period, payments are due while the application is under review.

Forgiveness Amount Calculation

Amounts entered into the Owner Compensation section will be reported as payroll cost on Line 1 of 3508EZ or Line 1 of 3508 via inclusion on line 9 of Schedule A. Amounts entered in the Owner Compensation section will be added to Employee Compensation and reported as payroll cost on Line 1 of 3508EZ or Line 1 of 3508 via inclusion on line 9 of Schedule A.

Loan forgiveness is based in part on your ability to maintain or rehire employees, and to maintain salary levels. It is important to note that the FTE calculation must be used consistently throughout the loan forgiveness process.

Chase Business Services

Covered Period8- or 24 week-period starting with the Loan Disbursement DateIf you received your loan before June 5, you can choose between using an 8- or a 24-week period. You must use the 24-week period if you received your loan on or after June 5. Providing an accurate calculation of the loan forgiveness amount is the responsibility of the borrower, and the borrower attests to the accuracy of its reported information and calculations on the Loan Forgiveness Application. The federal government plans to audit PPP loans in excess of $2 million, to ensure that businesses that received these loans truly needed them due to the coronavirus pandemic. Choose between weekly, biweekly , twice a monthly, monthly, or other.

Plus, all the employees said they didn’t want to come back even at full salary. Make sure you understand that you have these options for calculating FTE. This calculation is going to be very important for forgiveness purposes as you’ll see when we walk through the application. There is a detailed discussion of FTE’s in the SBA’s January 19, 2021 Interim Final Rule (starting on page 31.) If you have reduced employee headcount, hours and/or wages, it is worth your time to read and understand it before you complete your forgiveness application.

Related Services

Any unforgiven portion of the loan may be repaid to the lender at any point in time. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation. Carefully review the requirements in the Paycheck Protection Program Loan Forgiveness Application form,EZ form , or Forgiveness Application for PPP loans under $150,000 , along with applicable instructions on the U.S.

• Instructions for how to use the worksheet are included in the Standard Forgiveness Application Guide.
• The SBA then has up to 90 days to confirm the loan forgiveness application before it remits funds to be applied to the PPP loan.
• The SBA has 90 days to render their final decision on the amount they will forgive.
• The Authorized signer will certify each question with their initials and then sign the application.
• If you do not upload the required documents with your application, we will not be able to review or process it.

Once you have completed Schedule A and the Schedule A Worksheet, you can return to the Calculation Form. Use the information from Schedule A to fill in the lines on this form, and complete the calculations to determine your loan forgiveness.

Step 5: Perform forgiveness amount calculations

Enter the amount of business mortgage interest payments during the covered period for any business mortgage obligation on real or personal property incurred before February 15, 2020. Enter total eligible payroll costs incurred or paid during the covered period.

When repayment does begin, any loan amount that is not forgiven will need to be repaid, along with a low, 1% fixed annual interest rate on the amount not forgiven. You’ll repay through monthly payments automatically debited from your Square linked account. If your loan is not fully forgiven, any unforgiven loan amount will need to be repaid, along with a low, 1% fixed annual interest rate on that amount. Yes, if you have used the full amount of your PPP loan at the time you are applying for forgiveness. If the forgiveness application is for a Second Draw PPP loan that was for more than $150,000, you must submit a forgiveness application for your First Draw PPP loan before or at the same time as you submit the forgiveness application for the Second Draw PPP loan. Eligible payroll costs are a combination of cash compensation, non-cash benefits and owner compensation.

What is the difference between non-payroll costs being paid vs. incurred?

Records Issue Date or “RID” means the date that all design and assignment information is sent to the necessary service implementation groups. SAP Application means all Packages (i.e. all Software and Third Party Software) licensed under a Software Contrac and/or SAP cloud services for which Licensee has a valid subscription, excluding User Interfaces for ERP, SAP Technology Solutions and all database Packages. This “EZ” version of the application is simple and light on guidance.

You can only use the PPP Loans for mortgage or rent payment under the Covered Period. Unfortunately, you can no longer apply for a PPP loan through Truist as the SBA has stopped accepting new PPP applications. Unfortunately, you can no longer apply for a PPP loan through Truist as the Small Business Administration has stopped accepting new PPP applications.

Paycheck Protection Program

If you’re using Form 3508S to apply for forgiveness, you won’t have any reductions in the loan forgiveness amount based on reductions in employees, or employee salary, or wages that would otherwise apply. In general, you’ll be required to submit payroll, FTE employee headcount, and non-payroll documentation with your application. If your loan amount is $150,000 or less, you won’t be required to submit any documents beyond the required forgiveness certification, though you will have to keep documents supporting your forgiveness certification.

• The SBA has determined that 40 hours per week is considered full time for the PPP.
• The bottom line is that, while the PPP forgiveness process still has some details that need to be worked out, we are now gaining more clarity by the day.
• Accrued interest on the PPP loan forgiveness amount is included in the total forgiveness amount.
• The SBA is no longer accepting the legacy 3508S, 3508EZ, and 3508 forms as of March 5th, 2021.

Within 30 days of notice from Regions, the borrower may notify the lender that it is requesting that the SBA review the lender’s decision. Regions must also notify the borrower of a final SBA loan review decision, including an SBA loan review decision on forgiveness , as well as remittance by SBA to Regions of the loan forgiveness amount, whether partial or full. Regions has 60 days to review your application and submit its decision regarding loan forgiveness to the SBA. Regions will send you a DocuSign package for your review and eSignature before submitting the application to the SBA. The SBA will, subject to any review, remit the appropriate forgiveness amount to Regions, plus any interest accrued through the date of payment. Complete and accurate applications will move through the process faster, so please take your time filling out the forgiveness application. FTE is a unit of measure for PPP forgiveness in which an employee who works on average at least 40 hours per week is equal to 1.0 FTE.

Full-Time Equivalency (FTE) Reduction Calculation

As mentioned above, other forgivable expenses for your PPP loan (though not for more than 25% of your proceeds) are mortgage interest, rent, and utilities. Most of Forgiveness Application the Schedule A form will ask you to reference responses that can be calculated using the Schedule A Worksheet, or payroll reports that produce similar information.

Any employees working less than 40 hours per week are calculated at a proportionally lower FTE level. Depending on the size of the loan and the forgiveness application used, this calculation will be used to determine whether the borrower’s loan forgiveness amount must be reduced due to a statutory requirement concerning reductions in full-time equivalent employees. A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan if the borrower has used loan proceeds for which the borrower is requesting forgiveness. It contains fewer calculations and requires you to make certifications regarding how you used PPP funds as required by law. You will not be required to submit supporting documents, however, the SBA does require that you retain all loan forgiveness supporting documents such as employment records/payroll and non-payroll documentation for a period of up to 4 years. If you have both a first draw and a second draw loan, you must apply for loan forgiveness on your first draw loan before or at the same time as you file your application for forgiveness on your second draw loan.

Before you can apply for PPP loan forgiveness, you’ll first want to make sure you’re eligible to apply. Be sure your covered period has ended and you know the PPP loan proceeds that were used for eligible costs. Synovus will process your application for loan forgiveness as the originating lender for your PPP loan based on the guidance and parameters established by the SBA, which may be subject to change. The SBA, and not Synovus, sets the criteria for loan forgiveness, including the eligibility criteria and the parameters that determine how much of your loan may be forgiven. The SBA may instruct us to hold your loan forgiveness application if it decides to conduct a review of your application, or it may instruct us to deny your loan forgiveness application.