Dear Clients, Business Associates and Friends:
The Small Business Administration (SBA) has released two Paycheck Protection Program (PPP) Loan Forgiveness Applications with instructions. Provided below are links for the two applications:
The updated Form 3508 has been reduced to five pages and the new Form 3508EZ is two pages long. Both forms were designed to make the application process simpler.
The forms now take into account the new rules issued thru the Payroll Protection Flexibility Act (PPFA). Those provisions included a 24 week covered period for expenses, and an increased percentage for non payroll costs.
The new EZ version applies to borrowers that can meet one of three criteria below:
Are self-employed and have no employees; OR
Did not reduce the salaries or wages of their employees by more than 25%, and did not have any full time equivalent reductions of their employees; OR
Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
New guidance will now limit owner compensation for the 24 week covered period to $20,833 (the 2.5-month equivalent of $100,000 per year) or the 2.5-month equivalent of their applicable compensation in 2019, whichever is lower. For an 8-week Covered Period, this amount is capped at 8/52 of compensation (up to $15,385).
Employee compensation will be capped at $46,154 ( $100,000 annual / 52 *24 ) for the 24 week covered period or $15,385 for an 8 week period.
If the borrower received its PPP loan before June 5, 2020, the borrower may elect to use either the 8 week or 24 week covered period. For any loans received after June 5, 2020, the borrower must use the 24 week covered period.
AS ALWAYS, WAGNER & ZWERMAN IS HERE TO ANSWER ALL OF YOUR QUESTIONS AND CONCERNS. WE ARE ALL IN THIS TOGETHER.
** IF YOU HAVE MISSED ANY PREVIOUS WZ WEBINARS OR COMMUNICATION IN REGARDS TO COVID-19, PLEASE REFER TO OUR WEBSITE