New Paycheck Protection Program Forgiveness Applications and Guidance

The U.S. Treasury released revised Paycheck Protection Program (PPP) Loan Forgiveness Applications and issued additional guidance clarifying maximum payroll costs amounts eligible for forgiveness. 

Revised PPP Loan Forgiveness Applications

The new forms reflect changes enacted by the PPP Flexibility Act of 2020. To apply for PPP Loan Forgiveness, borrowers must complete either the Loan Forgiveness Application, Revised June 24, 2020, or Loan Forgiveness Application Form 3508EZ and submit it to the lender that is servicing their loan.

Form 3508EZ eliminates the need to fill out Schedule A and the Schedule A Worksheet. Form 3508EZ is for borrowers who meet one of the following criteria:

• Are self-employed, independent contractors, or sole proprietors that have no employees
• Did not reduce annual salary or hourly wages of any employee by more than 25% during the Covered Period or the Alternative Payroll Covered Period and did not reduce the average paid hours of their employees
• Were unable to operate during the Covered Period at the same level of business activity due to compliance with health requirements directly related to COVID-19, and did not reduce salary or hourly wages of their employees by more than 25%

Maximum Payroll Cost Eligible for Forgiveness

• The maximum payroll costs, including salary, wages, and tips up to $100,000 of annualized pay per employee eligible for forgiveness is $15,385 for the eight-week covered period or $46,154 for the 24-week Covered Period.
• The maximum owner compensation calculation based on 2019 net profits is 8/52 of 2019 net profits up to $15,385 for the eight-week covered period or 2.5 months’ worth (2.5/12) of 2019 net profit up to $20,833 for the 24-week Covered Period.

We anticipate the release of additional guidance later this week and will continue to send updates.

We strongly encourage borrowers to contact their Whittlesey advisor to help interpret the ever-changing guidance and discuss ways to maximize loan forgiveness.