Insights

MPL General Counsel Corner – PPP forgiveness tent has definitely expanded

June 22, 2020

There have been numerous updates related to the PPP forgiveness application.  Importantly, a new EZ version and revised full version were posted with instructions.  In my reading of the details, the PPP forgiveness tent has definitely expanded.

Rather than reinvent the wheel, I thought that Trout CPA put out an excellent overview and video highlighting the key points (see below).  Also, if interested, an interim final rule (creatively named the Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules) was also published on 6/17 explaining the new forgiveness details.

The EZ version of the forgiveness application applies to borrowers that:

  • Are self-employed and have no employees; or
  • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or
  • Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

The new and revised full version of the forgiveness application has the following updates:

  • The employee forgivable pay cap is expanded to $46,154 if 24 weeks is selected and remains at $15,385 if 8 weeks is selected.
  • Owner compensation is expanded up to $20,833 (or 2.5 months’ worth of 2019 pay if less) if 24 weeks is selected and remains at $15,385 if 8 weeks is selected.
  • New FTE reduction exceptions and safe harbors from the PPP Flexibility Act have been added.
  • New clarification that health insurance paid during the covered period does not qualify for S-corporation owners.

Links for applications, instructions, and worksheets:

Video Overview of New Applications by Trout CPA Tax Manager Dan Chodan, CPA
EZ Loan Forgiveness Application
EZ Loan Forgiveness Instructions
EZ Loan Forgiveness Application Worksheet
Loan Forgiveness Application
Loan Forgiveness Instructions
Loan Forgiveness Application Worksheet

Here are some other things that may be important or relevant for you:

Finally, I know I was going to send these out on Fridays.  However, I felt the two updates this week were important for everyone to know given it was updates to the forgiveness portion of the PPP.  Barring another major announcement, I will get back on the Friday schedule next week.

Please see all of our prior updates at the this link or if you would like to be added to our email list, please click here

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com) or anyone in our office with questions or comments.  

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