On June 16 and 17, 2020 the Small Business Administration (SBA) released revised loan forgiveness application forms and also provided additional guidance for a few provisions under the Paycheck Protection Program (PPP) loans. We believe further guidance may be forthcoming; however, the following information will be helpful as borrowers begin the process of applying for loan forgiveness.

Congress has continued to legislate for the small business community, specifically targeting the Paycheck Protection Program (PPP) loans. On June 3, 2020, the Senate approved House Bill 7010 which is commonly referred to as the Paycheck Protection Program Flexibility Act of 2020. This bill provides some flexibility to small businesses in complying with the terms of the PPP loan. A few key features of this bill are summarized below.

The Small Business Administration (SBA) released guidance on May 22, 2020 specifically related to the loan forgiveness piece of the Payroll Protection Program (PPP) loan. Although we received a glimpse of this guidance in the most recently released loan forgiveness application there were some new developments that we will clarify below.

This past weekend the Small Business Administration (SBA) released the loan forgiveness application for borrowers who received funds under a Payroll Protection Program (PPP) loan. We are still anticipating formal guidance to be issued in the next few days from the SBA, but the application form itself provides some answers to questions we have been tackling in recent days.

We recently addressed the question, “do I need to consider returning my PPP loan funds?”. The SBA had provided guidance that if any borrower returns their funds by May 14, the borrower will have been deemed to make their PPP loan certification in good faith. However, today on May 13, the SBA has issued additional guidance regarding the good faith certification.

We recently provided guidance on how to spend your Paycheck Protection Program (PPP) loan funds in order to receive maximum forgiveness. However, we’re now being asked a new question: “Should I return the PPP funds I’ve received?”

UPDATED 6/3: It’s now time to start tracking your use of the funds to determine the amount to be forgiven. To aid you in this process, we’ve prepared a few Excel workbooks which you can download by clicking the link below. Each workbook contains instructions, the loan forgiveness calculator, determination of your FTE (full time equivalent), actual tracking of costs template, a certification template and two examples so you can “see the math” in action.

On Thursday, April 30 the IRS announced in Notice 2020-32 that expenses paid using forgiven Payroll Protection Plan (PPP) loans are not deductible. The IRS is clearly seeking to eliminate a potential double tax benefit.

We have been providing you many updates during the COVID-19 pandemic, with most centered around the Payroll Protection Plan and loan forgiveness. And rightly so! The prospect of tax-free funds to businesses is an extraordinary benefit. However, there is another provision available to employers and the self-employed that has not received as much attention: the deferral of employment tax deposits and payments.

Congratulations on receiving your Paycheck Protection Program (PPP) funds! You and your bank have worked hard to ensure that you have the funds available to maintain payroll and operations for the next eight weeks. But the hard work is far from over. And you’re likely asking, “What do I do now to qualify for loan forgiveness?”