To make applying for forgiveness of the Paycheck Protection Program (PPP) easier, the Small Business Administration released the new PPP Loan Forgiveness Application Form 3508EZ. This short form is used if borrowers meet one of the following conditions:
- Are self-employed and do not have any employees OR
- Did not reduce employees’ hours or did not reduce their salaries or wages by more than 25% during the Covered Period OR
- Experienced reductions in business as a result of health directives by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration related to Coronavirus (COVID-19) AND did not reduce the salaries or wages of your employees more than 25%.
Employees are defined as only those which did not receive, during any single period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000.
If none of these apply, borrowers cannot use SBA Form 3508EZ and instead must apply for forgiveness of their PPP loan using the Updated PPP Loan Forgiveness Application Form 3508 with the revised Schedule A Worksheet. This form was updated on June 16, 2020.
Remember, the parameters of the PPP Loan were changed with the Paycheck Protection Program Flexibility Act. This loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities of which at least 60% of the forgiven amount must have been used for payroll. For more information on the new PPP Forgiveness parameters, get our free PPP Loan Forgiveness Guide below.
*This document simplifies complex Acts as it is understood by Time Equipment Company. It is not to be taken as legal advice. The regulations for this program are changing. For further information about the Paycheck Protection Program please visit www.sba.gov or www.coronavirus.gov