SBA & Treasury Release New PPA Forgiveness Application and EZ Application
On Wednesday, the SBA, in coordination with the Treasury, released a revised PPP loan forgiveness application and also released a new EZ application for PPP forgiveness.
The applications show changes made by the Paycheck Protection Flexibility Act of 2020, P.L. 116-142, which became law June 5. You can download the applications and instructions here:
Highlights of the revisions:
Though costs of health insurance for owners of S-Corps cannot be included in payroll costs, retirement costs can.
Borrowers won’t have to wait until Dec. 31 to apply for forgiveness to use the safe harbors for excluding salary and hourly wage reductions and reductions in the number of FTEs. Loan forgiveness reductions can be applied as of the date that the forgiveness application is submitted.
For borrowers who received loans before June 5, there is a choice between using the original 8-week covered period or the new 24-week covered period.
Highlights of the EZ format:
Requires fewer calculations and less documentation than full version
The EZ application can be used by borrowers who are self-employed and have no employees
If borrowers did not reduce hours or number of employees, and did not reduce salaries or wages of employees by more than 25%, they are eligible to use the EZ application.
If health directives related to COVID-19 reduced business activity for a borrower, but they did not reduce the salaries or wages of their employees by more than 15%, they are eligible to use the EZ application.