For most PPP loan recipients, the 24-week Covered Period ended during the past several weeks, so now it is time to apply for forgiveness with your lender. The forgiveness application used and amount of documentation required will first depend on the amount of your PPP loan.

If you received a PPP loan of $50,000 or less, and together with any affiliates did not receive PPP loans totaling $2 million or greater, you may use the simplified forgiveness application, SBA Form 3508S (Instructions). This form requires fewer calculations and less documentation, and you are exempt from reductions in loan forgiveness amounts based on reductions in employee headcount or in salaries or wages. You must still certify that you used the funds for eligible expenses, that at least 60% of the funds were used on payroll costs, and that compensation to owners did not exceed certain limitations; however, you are not required to show the calculations used to determine this. Along with the forgiveness application, you will need to provide the following documentation to your lender:

  1. Bank statements or third-party payroll service provider reports documenting cash compensation paid to employees
  2. Quarterly federal payroll tax filings (typically Form 941)
  3. Quarterly state unemployment insurance tax filings (SUI returns for Alabama employers)
  4. If you did not use all of the funds on employee gross wages, you will also need to provide the following for any other eligible expenses covered by the PPP loan:
    1. For employer contributions to employee health insurance and retirement plans – Payment receipts, cancelled checks, or account statements
    2. For business mortgage interest payments – Lender amortization schedule and receipts or cancelled checks; or lender account statements from February 2020 through one month after the end of the Covered Period
    3. For business rent/lease payments – Lease agreement and receipts or cancelled checks; or lessor account statements from February 2020 through one month after the end of the Covered Period
    4. For business utility payments – Invoices from February 2020 and those paid during the Covered Period, as well as receipts, cancelled checks, or account statements.

If you are a self-employed individual and do not have any employees, you will need to provide a copy of your 2019 Form Schedule C that you used for your loan application to your lender with the simplified forgiveness application.

If you received a PPP loan greater than $50,000, you must use either SBA Form 3508 (Instructions) or 3508EZ (Instructions), both of which require additional calculations and documentation. If you need our assistance with your loan forgiveness application, please contact your JMF accountant or email  Also, please have the following information available:

  1. Whether you reduced annual salary or hourly wages of any employee (who earned less $100,000 in 2019) by more than 25% during the Covered Period compared to January through March 2020. If so, please identify which employees.
  2. If you were unable to operate between February 15, 2020 and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance issued by governmental agencies related to the maintenance of standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19.
  3. A copy of your PPP loan documents from your lender and the SBA.
  4. Payroll report showing individual employee wages and hours worked during the Covered Period, including the last 4 digits of each employee’s social security number.
  5. Payroll reports showing individual employee hours worked for the following Reference Periods:
    1. February 15, 2019 – June 30, 2019
    2. January 1, 2020 – February 29, 2020
  6. Payroll Schedule (pay date frequency) for the Covered Period and Reference Periods above.
  7. If you process payroll using QuickBooks, then instead of items 4-6 above, you may provide a backup of your QuickBooks file through the end of the Covered Period. If the hours are not tracked in QuickBooks for your salaried employees, please provide the hours worked for each during the Covered Period and Reference Periods above.

JMF Video on PPP Loan Forgiveness – JMF CPAs Kristi Moore and Thomas Hahn explain the latest process to apply for your PPP loan forgiveness; Created 10/22/2020

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