Written by Dan Chodan, CPA | Jun 18, 2020 2:30:00 PM
Yesterday, the Small Business Administration (SBA) posted a new EZ version of the forgiveness application, in addition to a revised version of the full forgiveness application.
In the video below, Tax Manager Dan Chodan, CPA discusses the borrower-friendly applications which require fewer calculations and less documentation.
The EZ version of the 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%.
Additionally, the new and revised applications address the following:
- 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: