On Monday, June 22, 2020, the U.S. Small Business Administration (SBA) released Revisions to Loan Forgiveness Interim Final Rule and SBA Loan Review Procedures Interim Final Rule.
The most significant clarification states that borrowers are allowed submit a loan forgiveness application at any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness. But, if the borrower applies for forgiveness before the end of the covered period and reduced any employee’s salaries or wages by more than 25%, the borrower must account for the salary reduction for the full 8-week or 24-week covered period.
For example, if you use up the proceeds by week 14, you can apply sooner than 24 weeks and stop tracking your payroll costs & FTE headcounts (unless you’re subject to wage reductions, in which case you need to track all 24 weeks).
Another notable clarification states that the employer portion of retirement plan funding for owner-employees or S-Corporations and C-Corporations is now capped at 2.5 months’ worth of the 2019 contribution amount. In addition, healthcare costs paid on behalf of owner-employees of S-Corporations are not eligible for forgiveness.
Request Our PPP Total Tracker Today
Contact KRD today at info@krdcpas.com or 847-240-1040 for your complimentary PPP expense & forgiveness tracker spreadsheet, now called the Total Tracker. This spreadsheet can be used for expense and payroll tracking of PPP loan proceeds.
The Total Tracker is not 100% inclusive of all situations, but it incorporates the latest guidance through Monday, June 22 and creates the SBA Loan Forgiveness Application, including Schedule A.
