Paycheck Protection Program Update: 5/29/20
On May 15, the Small Business Administration (SBA) and Treasury Department released additional Paycheck Protection Program (PPP) guidance in the form of the PPP Loan Forgiveness Application.
To our valued clients, our goal is to make this next step as smooth as possible for you and your business.
Below we have outlined some key information to help you as you prepare for the forgiveness portion.
Are PPP loan forgiveness applications being accepted currently?
No. Clients must wait until the 8-week Covered Period has ended.
Once the Covered Period has ended, our team will provide a link to the online application, along with instructions on uploading all required documents to our client portal.
When does my Covered Period begin and end?
Your 8-week Covered Period begins on the day your loan was disbursed.
For example, if you received your Paycheck Protection Program loan proceeds on Monday, April 20, the first day of your Covered Period is April 20 and the last day is Sunday, June 14.
Once the Covered Period has ended, can I apply for forgiveness right away?
Because you’ll need to complete the final payroll period that includes the final days of your Covered Period, as well as prepare and assemble your supporting documentation, it is unlikely that you will be able to apply immediately.
Does my payroll period need to coincide with the Covered Period?
No. You do not need to change any of your payroll periods or prepare special payroll to coincide with your Covered Period.
What supporting documents will I need to include with my forgiveness application?
- Payroll reports for the pay periods that include your Covered Period
- Payroll tax filings for the Covered Period that are/will be reported to the IRS (typically Form 941) and state quarterly payroll tax returns
- Payment receipts, cancelled checks, or account statements documenting any employer contributions to employee health insurance and retirement plans that you include in the forgiveness amount
- Documentation of the number of FTE (full-time equivalent) employees
o For the period prior to the PPP loan:
– February 15, 2019 – June 30, 2019, or
– January 1, 2020 – February 29, 2020, or
o For seasonal employers:
– February 25, 2019 – June 30, 2019 or
– January 1, 2020 – February 29, 2020 or
– any consecutive 12-week period between May 1, 2019 and September 15, 2019
- The FTE documentation requirement is satisfied with the Form 941 that is, or will be, filed with the IRS, and state quarterly individual employee wage reporting
Business Mortgage Interest Payments
- A copy of your lender amortization schedule
- Receipts, cancelled checks, or lender account statements from February 2020, including the 8-week Covered Period, through one month after the end of the Covered Period
Business Rent Payments
- A copy of your lease agreement
- Receipts, cancelled checks, or lessor statements from February 2020, and those paid during the Covered Period
Will the SBA be releasing additional guidance?
Yes, the SBA is expected to release additional guidance. When available, this information will be included in a future update.
For Previous Updates on the CARES Act and Paycheck Protection Program, Click Here.