PPP Loan Forgiveness Update
Easytrack Payroll has been informed that some banks are now accepting PPP Loan Forgiveness applications. As such, we want to provide you with some details based on what we know right now.
Here are a few important updates:
1) New streamlined application specifically for companies who borrowed less than $50,000
a) Click hereto view the new application
b) Borrowers whose loans were less than $50,000 are no longer required to reduce the amount eligible for forgiveness if:
- They reduced the salary or hourly wages of employees who earned less than $100,000 in 2019during the covered period relative to the 1st quarter of 2020
- They reduced full-time equivalent employees during the covered period relative to the base period
In other words, for companies who borrowed less than $50,000, the total amount eligible for forgiveness is not subject to reduction if they reduced salaries/wages or headcount.
Full instructions for how to complete the application can be found on the form itself.
2) Companies with loans below $150K may want to WAIT to apply for forgiveness as Congress may pass legislation providing automatic forgiveness of these loans. This would likely reduce the amount of time and supporting documentation required to receive forgiveness.
3)Time is on your side: You have 10 months from the end of your PPP Covered Period to apply for forgiveness. Banks have 60 days to review and submit forgiveness recommendations to the SBA, and the SBA has 90 days to review and provide approval.
Reference our previous article here which includes links to the various PPP Loan Forgiveness Applications and information on qualified payroll costs, wage caps per covered period, etc.
Please note that this was published before the new rules for borrowers who received a loan of less than $50,000 so it's important to review the instructions on the actual application that you are completing.
In preparation, you may gather the following items:
(Contact your banker to confirm what will be required as this may vary.)
1) Payroll Details Report:
a) Loginto your payroll account and go to the Reports tab
b) Set the date Range per your PPP Loan Period (8- or 24-weeks - confirm this with CPA/banker if unsure)
c) Select Summary by Employee from the drop-down that defaults to All Checks
d) Click Update Report
e) Download as a PDF or Excel file by clicking on the applicable link
2) Forms 941 and State Unemployment Tax Reports:
a) PDF copies are available in ShareFile
b) Note that we are currently processing 3rd Quarter reports and will notify you via email when they are available
3) Health Insurance Invoices,if applicable:
a) Save a copy of your health insurance invoice for each month that fell within your loan period
b) Qualified payroll costs will be equal to invoice totals LESS any amount withheld from employee paychecks during the period
4) Retirement Plan Reports/Proof of Employer Contributions Paid, if applicable:
a) Pull these reports from your retirement plan administrator/online portal
5) Utilities/Rent/Mortgage Interest Invoices and Proof of Payment:
a) Consult your CPA with any questions related to these items
6) Bank Statements:
a) These may or may not be required, but you should have them ready to go as a precaution
If you are able to apply for forgiveness through your bank, and choose to do so, it is important that you work with your CPA to ensure you submit everything that is required, and the relevant application is completed correctly. Easytrack cannot advise clients how to complete the application. We have payroll reports available to you as supporting documentation and will do our best to answer any payroll-specific questions.
We will continue to monitor activity on PPP Loan Forgiveness and update you as we learn more.