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EZ Application Details


PPP - Loan Forgiveness

We’re proud to partner with NBT Bank in providing informative, timely updates on the ever-changing PPP Forgiveness regulations. Please review our webinars, EZ application update details and more to help support your business in this forgiveness process. To learn more about NBT Bank, visit: NBT Bank – Business.

 

New PPP Loan Application Highlights Update

The U.S. Small Business Administration (SBA) with the U.S Department of the Treasury, released on Wednesday June 17th, 2020 the updated Forgiveness Application including a new 2-page EZ Application.  The application reflects the recent changes of the Paycheck Protection Flexibility Act of 2020 signed into law on June 5th, 2020.

Refer back to our original post, Paycheck Protection Program – Loan Forgiveness for a deep dive into the forgiveness program.

New EZ Application Details:

The new EZ Forgiveness Application requires fewer calculations and much less documentation compared to the full application. The EZ application can be used by borrowers that meet one of the following:

  1. Are self-employed and have no employees;
  2. Did not reduce the salaries/wages of their employees by more than 25% and did not reduce the number or hours of their employees; or
  3. Experienced reductions in business activity due to health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

Application Updates:

  • S corporation – Owners cannot included Health Insurance costs as it is already included in their wages.
  • Safe harbors for excluding salary/hourly wage and FTE reductions can be applied as of the date the loan forgiveness application is submitted. Borrowers don’t have to wait until Dec. 31 to apply for forgiveness to use the safe harbors.
  • Borrowers that received loans before June 5th, 2020 can choose between using the original eight-week covered period or the new 24-week covered period.

New Interim Final Rule (IFR) published on 6/17/2020:

Business Owners are capped by 2.5 months or $20,833 which is in line with the original application process (Unlike employees who are capped at $46,154 for the 24-week covered period).  Business Owners maximum forgiveness is the Lesser of $20,833 paid during the Covered Period ($15,385 if elected 8-week cover period) or Compensation Noted Below;

  • Self-Employed – Based on 2019 net profit, Form 1040, Schedule C, Line 31, multiplied by 2.5/12
  • General Partners – 2019 net earnings from self-employment, Schedule K-1, Line 14a (Reduced by Section 179 deduction, Unreimbursed Partnership Expenses, and Depletion from Oil & Gas Properties) multiplied by 0.9235, multiplied by 2.5/12
  • C and S-Corps – 2019 Cash Compensation Payroll Costs, multiplied by 2.5/12

 

 

We expect additional guidance to come out in the coming weeks from the SBA and the Treasury.  Continue to check back for further updates.  See below for the links to the new documents.