Everything You Need To Know About the PPP Forgiveness Application
Did you know that the Small Business Administration has published the Payment Protection Plan (PPP) Loan Forgiveness Application? This is HUGE news for many small businesses across the country. If you are struggling to understand how applying for this loan forgiveness really works, then this is the blog for you! Our CPA firm in Mid-Missouri is here to share some NEW guidance with you in regard to the PPP Loan Forgiveness application, in this week's blog. If you have any questions, please do not hesitate to call our Central Missouri CPA firm today. We have four locations throughout Mid-Missouri, all of our phone numbers can be found on our website at www.WTCPA.com.
To access the PPP Loan Forgiveness Application, visit HERE.
SOURCE: https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
1. Alternative Payroll Covered Period: Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the eight-week period that begins on the first day of their first pay period following their PPP Loan Disbursement Date.
2. Average FTE: A simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours may be used at the election of the Borrower.
3. FTE Reduction Exceptions: Any FTE reductions in the following cases do not reduce the Borrower’s loan forgiveness.
a. Were fired for cause,
b. Voluntarily resigned, or
c. Voluntarily requested and received a reduction of their hours
4. Documents that each Borrower must submit with the PPP Loan Forgiveness Application
a. Payroll: bank statements or third-party payroll reports documenting the amount of cash compensation paid to employees
b. Payroll tax filings reported to the IRS (typically Form 941)
c. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported
d. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans
e. Documentation showing FTE during the selected time period which may include payroll tax filings reported or state quarterly wage reports.
f. Copy of lender amortization schedule and receipts or cancelled checks verifying eligible mortgage interest payments
g. Copy of current lease agreement and receipts or cancelled checks verifying payment
h. Copy of invoices, receipts, cancelled checks, or account statements for utility payments
Documents that Each Borrower Must Maintain but is Not Required to Submit
PPP Schedule A Worksheet or its equivalent and the following:
a. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 1, including the “Salary/Hourly Wage Reduction” calculation, if necessary.
b. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 2; specifically, that each listed employee received during any single pay period in 2019 compensation at an annualized rate of more than $100,000.
c. Documentation regarding any employee job offers and refusals, firings for cause, voluntary resignations, and written requests by any employee for reductions in work schedule.
d. Documentation supporting the PPP Schedule A Worksheet “FTE Reduction Safe Harbor.”
All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements. The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request.
Our Mid-MO accounting firm understands that this can be a lot of information to take in at once and you may have trouble understanding all of it. That's ok! That is what we are here for. Please do not hesitate to give us a call, we'd be happy to answer any questions you may have. Our phone numbers are listed below. Follow us on our social media channels listed below to stay up to date on our latest announcements.
Everything You Need To Know About the PPP Forgiveness Application
To access the PPP Loan Forgiveness Application, visit HERE.
SOURCE: https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
NEW Guidance About the PPP Loan Forgiveness
1. Alternative Payroll Covered Period: Borrowers with a biweekly (or more frequent) payroll schedule may elect to calculate eligible payroll costs using the eight-week period that begins on the first day of their first pay period following their PPP Loan Disbursement Date.
2. Average FTE: A simplified method that assigns a 1.0 for employees who work 40 hours or more per week and 0.5 for employees who work fewer hours may be used at the election of the Borrower.
3. FTE Reduction Exceptions: Any FTE reductions in the following cases do not reduce the Borrower’s loan forgiveness.
a. Were fired for cause,
b. Voluntarily resigned, or
c. Voluntarily requested and received a reduction of their hours
4. Documents that each Borrower must submit with the PPP Loan Forgiveness Application
a. Payroll: bank statements or third-party payroll reports documenting the amount of cash compensation paid to employees
b. Payroll tax filings reported to the IRS (typically Form 941)
c. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported
d. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans
e. Documentation showing FTE during the selected time period which may include payroll tax filings reported or state quarterly wage reports.
f. Copy of lender amortization schedule and receipts or cancelled checks verifying eligible mortgage interest payments
g. Copy of current lease agreement and receipts or cancelled checks verifying payment
h. Copy of invoices, receipts, cancelled checks, or account statements for utility payments
Documents that Each Borrower Must Maintain but is Not Required to Submit
PPP Schedule A Worksheet or its equivalent and the following:
a. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 1, including the “Salary/Hourly Wage Reduction” calculation, if necessary.
b. Documentation supporting the listing of each individual employee in PPP Schedule A Worksheet Table 2; specifically, that each listed employee received during any single pay period in 2019 compensation at an annualized rate of more than $100,000.
c. Documentation regarding any employee job offers and refusals, firings for cause, voluntary resignations, and written requests by any employee for reductions in work schedule.
d. Documentation supporting the PPP Schedule A Worksheet “FTE Reduction Safe Harbor.”
All records relating to the Borrower’s PPP loan, including documentation submitted with its PPP loan application, documentation supporting the Borrower’s certifications as to the necessity of the loan request and its eligibility for a PPP loan, documentation necessary to support the Borrower’s loan forgiveness application, and documentation demonstrating the Borrower’s material compliance with PPP requirements. The Borrower must retain all such documentation in its files for six years after the date the loan is forgiven or repaid in full, and permit authorized representatives of SBA, including representatives of its Office of Inspector General, to access such files upon request.
Have Any Questions? Please Call Wilson Toellner CPA Today!
Our Mid-MO accounting firm understands that this can be a lot of information to take in at once and you may have trouble understanding all of it. That's ok! That is what we are here for. Please do not hesitate to give us a call, we'd be happy to answer any questions you may have. Our phone numbers are listed below. Follow us on our social media channels listed below to stay up to date on our latest announcements.
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For tax preparation services you can count on, call:
Sedalia -- (660) 827-4990
Marshall -- (660) 886-6815
Camdenton -- (573) 346-6822
Lake Ozark -- (573) 964-5739
Check out our website: www.WTCPA.com
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