News

SBA Releases New Loan Forgiveness Applications

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: