Timely & Relevant News: PPP Loan Forgiveness Application Released
The Small Business Association (SBA) recently released the PPP Loan Forgiveness Application. Further instructions are expected to be announced from the SBA. Below are several highlights from the program that are important to understand for calculation purposes for small business owners with a PPP Loan.
Adjusted Payroll Time Frame
The SBA implemented changes making it easier for businesses to reach 75% of their payroll requirement by adjusting the payroll period to 8 weeks. This will include an extra payroll cycle for companies who pay biweekly.
Payroll Calculation
Employers will be required to calculate wages separately for each full time employee. Wages cannot be reduced by more than 25%. Limitations apply to high-income earners.
Non-Payroll Costs
Non-payroll costs including mortgage interest, rent, and utilities can be included in the calculation. Pre-paid rent is not included.
In order to qualify for loan forgiveness, you will need to submit documentation, along with the application including payroll filings, payment receipts, canceled checks and statements. Rules and specifics pertaining to PPP Loans are subject to change.
If you have any specific questions we encourage you to consult with your tax advisor. We also welcome you to call us at 302.234.5655 or email us at contactus@covenantwealthstrategies.com to set up a mutually convenient date/time to speak.