PPP Rule Refinements & SBA Issues New EZ Forgiveness Application.
Attached is a link to an article detailing PPP Rule Refinements & SBA Issues New EZ Forgiveness Application.
Some of the highlights of recent changes to the PPP Program as I understand them are:
You may elect to report either under the original 8 week or an extended 24 week reporting period if you received your PPP loan prior to June 5.
Under 8 week reporting maximum salary which can be forgiven is $15,385 (100K annual salary divided by 52 weeks a year times 8 week reporting period).
Under 24 week reporting maximum salary which can be forgiven for an owner is $20,833 and for other employees $46,154 (100K annual salary divided by 52 weeks a year times 24 week reporting period). Loans June 5 or later are required to use the 24 week reporting period.
Owners Medical Insurance paid by the company is not able to forgiven.
Payroll costs (including salaries, state unemployment & portion of medical insurance paid for by company) were originally required to be 75% of total forgiveness amount. Rate is now reduced to 60% (Called the Payroll Cost Rule).
PPP loans after June 5 are no set to repay any unforgiven amounts over five years. Loans prior to that date are two years. Interest rate remains at 1%.
Business owners can apply for forgiveness anytime they are ready and if qualify under salaries and FTE safe harbors (do not have to wait until December 31 to submit your application).
You can use the EZ PPP Forgiveness Application if any of the three items below apply:
Self Employed with no employees or S Corporation with yourself as sole employee.
You had employees but did not reduce salaries/wages during the covered period by more than 25% and did not reduce the number of hours worked by employees.
You had employees but did not reduce salaries/wages during the covered period by more than 25% and due to sheltering in place not able to operate at same level of business that existed before February 15, 2020.
Be safe!
