The SBA recently issued Form 3508S (https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S.pdf) which greatly simplifies the loan forgiveness application for practices that received PPP Loans of less than $50k.
If you complete the forfeiture calculation simplify Initial the box next to each of the 7 questions, including the first question that asks the practice owner to confirm:
• The dollar amount for which forgiveness is requested does not exceed the principal amount of the PPP loan and:
– was used to pay costs that are eligible for forgiveness (payroll costs to retain employees; business mortgage interest payments; business rent or lease payments; or business utility payments);
– includes payroll costs equal to at least 60% of the forgiveness amount;
– if a 24-week Covered Period applies, does not exceed 2.5 months’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $20,833 per individual; and
– if the Borrower has elected an 8-week Covered Period, does not exceed 8 weeks’ worth of 2019 compensation for any owner-employee or self-employed individual/general partner, capped at $15,385 per individual.
According to the instructions available at: https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-3508S-Instructions.pdf, practice owners with PPP loans of less than $50k still need to submit additional paperwork with their lenders including:
Documentation verifying the eligible cash compensation and non-cash benefit payments from the Covered Period or the Alternative Payroll Covered Period consisting of each of the following:
1. Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
2. Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
a. Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
b. State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
3. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the Borrower included in the forgiveness amount.
Documentation verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period.
1. Business mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the Covered Period; or lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments.
2. Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments from the Covered Period; or lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments.
3. Business utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments
Practices with loans of less than $50k might as well reach out to their lender about submitting a Form 3508-S along with the applicable supporting documentation to have your loan forgiven as long as the full amount of the PPP loan was spent on qualifying payroll and facility costs. More info is available at: https://home.treasury.gov/news/press-releases/sm1148.