MSL CPAs Advisory Services Alert - SBA Revised Loan Forgiveness Form
/On June 16, 2020, the U.S. Small Business Administration (SBA) released a revised loan forgiveness form (Form 3508). The revised form incorporated changes from the Paycheck Protection Program Flexibility Act which was signed into law on June 5, 2020. The new form incorporates the following changes:
Changed the payroll cost requirement from 75% to 60%;
Extended the optional covered period of either 8 or 24 weeks;
Maximum per-employee compensation is adjusted to $46,154 if the 24-week covered period is selected;
Safe harbor date of restoring payroll and/or headcount is now the earlier of December 31, 2020, or the date of the forgiveness application.
Added additional certification for FTE Reduction Safe Harbor;
Owner compensation was clarified to be capped at 2.5x monthly payroll for the 24-week covered period (i.e., 20,833), or similar compensation from 2019, whichever is lower.
In addition, the SBA issued a new, shortened loan forgiveness form (Form 3508EZ). This form is significantly less complicated due to the elimination of the need to complete Schedule A and the Schedule A Worksheet. A borrower is eligible to use the Form 3508EZ if it satisfies one of the following:
Are self-employed and have no employees at the time of the PPP loan application; or
Did not reduce the salaries or wages of their employees by more than 25% during the covered period or alternative covered period, and did not reduce the number or hours of their employees, or
Did not reduce the salaries or wages of their employees by more than 25% during the covered period or alternative covered period and experienced reductions in business activity as a result of health directives related to COVID-19.
Both loan forgiveness forms and their related application instructions are located here.
As you have questions, please do not hesitate to contact your MSL advisor.
