Get Advice on Forgiving PPP Loans From the Small Business Association
As Congress debates the next stimulus package , many business owners have been waiting for guidance on the Payroll Protection Program (PPP) and how to qualify for loan forgiveness. The PPP is part of the $ 2.2 trillion CARES Act and offers small businesses forgivable loans to cover payroll costs for up to eight weeks. The program has already financed nearly 5.1 million loans worth more than $ 521 billion. For now, small businesses can apply for the remaining $ 130 billion by August 8th.
This week, the Small Business Association and the Treasury Department finally released a 10-page paper that addresses 23 of the most frequently asked questions from borrowers about forgiving PPP loans. The new guide includes four sections that tell you how to calculate how much of your PPP loan can be forgiven. These sections include general loan forgiveness, payroll costs, non-payroll costs, and loan forgiveness reductions.
While you might want to complete the PPP loan forgiveness process, there are still some unresolved issues. As the Journal of Accountancy reports , we do not have all the information we need – for example, a complete guide to reducing loan forgiveness for full-time equivalents (FTE) employees.
The next incentive bill also discussed broader options for forgiving PPP loans. The Washington Business Journal reports that more lawmakers are pushing for forgiveness for small PPP loans. Senate Republicans have included automatic forgiveness for loans below $ 150,000 in the HEALTH Act – along with some forgiveness options for loans ranging from $ 150,000 to $ 2 million – but we won’t know for sure until Congress agrees to a new deal.
In the meantime, you can apply for a PPP loan forgiveness using this free tool from the American CPA Institute (AICPA) and CPA.com, but you should wait until we have full details to submit Form 3508EZ .