June 18th, 2020
The Treasury has issued more documents in regards to PPP Forgiveness. They issued another Regulation and two new sets of forgiveness applications and related instructions.
The largest changes include:
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- It specifically says that you can request forgiveness for up to the 24 week equivalent of $100,000 of annualized pay per employee (46,154 per individual) if you are using the 24 week covered period.
- However, for owner-employees you are capped at 2.5 months’ worth of the lesser of a) your 2019 annual salary, or, b) $100,000. This would make the max come out to be $20,833 if you use the 24 week covered period option.
- This 2.5 month concept above would also apply to Schedule C borrowers “Compensation Replacement”.
- They released an “EZ” application to be used in certain circumstances. The top of the instructions will help you determine if you qualify to use the EZ application.
- While using the new 24-week covered period will allow more time to spend your funds on payroll costs and provide for a higher per employee limitation, there is a downside. By electing to use the 24-week covered period you will be subject to the FTE and Salary Reduction requirements all the way through the 24-week period. The regulations and related application do not allow for the borrower to cut short the 24-week period when reporting on these two requirements.
Please see below for applications and instructions:
PPP-Loan-Forgiveness-Application-Form-EZ-Instructions
PPP-Forgiveness-Application-3508EZ
PPP-Loan-Forgiveness-Application-Instructions
PPP-IFR–Revisions-to-the-Third-and-Sixth-Interim-Final-Rules