PPP Loan Forgiveness Application
The SBA released the
Apply for PPP loan forgiveness through your SBA lender – please contact your lender for clarification on requirements – we are here to help gather payroll documentation and information.
Loan Coverage Period
New Alternate Covered Period allows borrowers to optionally align their 8-week (56 days) period with the beginning of the first pay period immediately following loan funding.
- Borrowers who elect to use the Alternate Payroll Covered Period must apply the Alternate Payroll Covered Period wherever referenced in the application only and must apply the Covered Period based on actual funding date wherever referenced.
- To make adjustments to your pay period please complete and return this form
Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
- Payroll costs are considered paid on the pay date.
- Payroll costs are considered incurred on the day that the employee's pay is earned.
- Payroll costs incurred but not paid during the Borrower's last pay period of the Covered Period are eligible for forgiveness if paid on or before the next regular payroll date.
The SBA has also provided a prorated limit for employees who have wages in excess of an annual salary of $100,000. This prorated forgivable salary amount per employee, for the 8-week Covered Period, is a total of $15,385.
- Interest on mortgage
- Business rent or lease payments
- Utility services of electricity, gas, water, transportation, telephone, or internet access (contracts initiated prior to 2/15/2020)
An eligible nonpayroll cost must be paid during the Covered Period and may be paid on or before the next regular billing date, even if the billing date is after the Covered Period.
Eligible nonpayroll costs cannot exceed 25% of total forgiveness amount – this is not an “all or nothing” rule.
Full Time Employee (FTE)
The application does provide step by step instructions for calculating how FTE and wage reduction affects forgivability.
The SBA identifies additional FTE reduction exemptions which will not reduce the employer's loan forgiveness.
- Employees who were fired for cause, voluntarily resigned, or voluntarily requested and received a reduction in hours during the Covered/Alternate Period may be excluded - so long as their position was not filled by a new employee.
- Your PPP loan will also require documentation: the borrower must have made a good faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower.
- If you are prepared to bring your workers back and have offered an individual work that was then turned down, please report that to Colorado Unemployment: Complete the request for information here.
- Reports that you can find in Autopaychecks (or third party payroll service provider)
- Payroll Summary: (Reporting>>Report Archive>>select payroll’s relevant) showing cash compensation paid to employees each payroll
- Quarterly Reports: (Reporting>>Quarterly Reports on Demand>>select relevant quarters) Tax Forms (or equivalent) for periods that overlap the Covered/Alternate Period, including: 941's, state quarterly wage and unemployment tax filings
- CARES Paycheck Protection Program Report: (Reporting>>My Reports>>search for report title) Reports showing FTEs for the relevant application periods
- Documentation found outside of payroll reporting:
- Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans included in the forgiveness amount.
- Non-payroll costs to document: loan authorization schedules, lease agreements, receipts and cancelled checks verifying the eligible payments for the Covered Period, and invoices and payments made for business utilities during the Covered Period.
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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