New guidance and forms for PPP forgiveness came out this week, but we are still advising borrowers to wait for even more guidance to file for forgiveness. Here’s what you need to know. 

  • The Revised PPP Loan Forgiveness Application and instructions were introduced this week and incorporate the rules for the new 24-week covered period.  
  • There is a new EZ PPP Loan Forgiveness Application and instructions that applies to borrowers that: 
    • Are self-employed and have no employees OR 
    • Did not reduce salaries or wages by more than 25% & did not reduce hours or headcount OR 
    • Experienced reductions in business activity due to COVID-19 health directives 
  • Eligible payroll costs per employee 
    • Capped at $46,154 for 24-week covered borrowers 
    • Remains capped at $15,385 for 8-week covered period borrowers 
  • Owner Compensation Replacement 
    • Capped at the lesser of $20,833 or 2.5 months of 2019 net profit for 24-week borrowers 
    • Remains capped at $15,385 for 8-week borrowers 
    • Note: application instructions indicate all owners are capped at these amounts (including S Corp and C Corp owners) 
  • Health insurance for S Corp owners, Self-Employed & General Partners are not allowed 
  • Retirement contributions for S Corp owners are allowed 
  • Retirement contributions for Self-Employed and General Partners are not allowed
  • Partial forgiveness is available even if the borrower doesn’t use 60% on covered payroll costs

One thing is certain, there will be more to come. So that is why we are suggesting borrowers hold off on filing for the forgiveness even if they have used all of their PPP loan funds. In the meantime, please let us know if we can be of assistance as you calculate the forgiveness and begin to fill out the forms. We are here for you. 

theKFORDgroup team is ready to assist you with your tax questions.  Give us a call at (210)340-8351.

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