The Small Business Administration (SBA) released a new version of the Paycheck Protection Program (PPP) loan forgiveness application on Wednesday to incorporate changes made by the Paycheck Protection Flexibility Act of 2020 (PPFA) signed into law earlier this month. Additionally, the SBA has created a new EZ application for borrowers meeting certain criteria.
The revised Form 3508 reflects changes made by the PPFA which modified the qualifications for loan forgiveness as highlighted in ATKG’s June 5th newsroom article. Some notable changes as a result of the PPFA are:
Additional clarifications provided by the revised Form 3508 and accompanying instructions are as follows:
The SBA also released Form 3508EZ, a simplified version of the loan forgiveness application. Borrowers must meet at least one of three criteria in order to qualify to use the EZ form. They are as follows:
The SBA issued another Interim Final Rule on Tuesday which modifies previously issued Interim Final Rules to update them for changes made by the PPFA. It also provides some much-needed, although detrimental, clarification for self-employed borrowers. It limits owner compensation replacement for self-employed individuals to either:
Prior to the revision, the self-employed business owner would have been entitled to five months of payroll instead of 2 ½ months as the CARES Act had intended.
While the revised application, the new EZ application, and the Interim Final Rule provide some clarification and simplification, the voluminous amount of guidance still creates a very complex loan forgiveness process. ATKG will continue to assist you in navigating the complexities of the law, and we promise to keep you informed as new guidance is issued that may affect your business. Please contact your ATKG advisor with any questions you may have.
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Eric Abati joined ATKG as a Senior Manager in 2010 and was admitted as a Partner shortly thereafter. He is a proud graduate of The Florida State University. He has built an incredible CPA practice over the last 20+ years on the national, regional and local levels and has experience in numerous industries including real estate, construction, retail, restaurants, investment partnerships and non-profits.
For further information on this topic or other tax questions please contact Eric Abati or a member of our Tax practice at 210.733.6611 or firstname.lastname@example.org.