The official Paycheck Protection Program Loan Forgiveness Application.
The official Paycheck Protection Program Loan Forgiveness Application. DonkeyHotey/Flickr

The Small Business Administration (SBA) and the U.S. Dept. of the Treasury have just released the official Paycheck Protection Program Loan Forgiveness Application. Although the basic requirements and guidelines for getting a PPP loan forgiven remain the same, the 11-page application provides detailed instructions as well as some additional long-awaited clarifications.

In addition, the application covers a recently announced addition to the forgiveness rules, covering a situation in which a laid-off or furloughed employee doesn't wish to return to work.

Updated Details for PPP Loan Forgiveness

Here are several of the important clarifications to PPP loan forgiveness that are being put forward:

  1. The FTE calculation will be calculated using the sum of the average hours worked by your employees divided by 40 hours and rounded to the nearest tenth.
  2. An "alternative payroll covered period" that aligns with your company's actual payroll period will be permitted.
  3. Interest and lease payments paid on personal property like cars and equipment will be permitted as forgivable expenses, along with the mortgage interest on real property.
  4. Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
  5. Addition of a new exemption from the reduction of loan forgiveness reduction, for borrowers who have made a good-faith, written offer to rehire workers that was declined.

You can view and download the application here.

More Guidance to Come

The SBA will be releasing additional outlines soon to assist borrowers with their applications and lenders with guidance on their responsibilities.

The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic. Although many companies have benefited from the program, the hastiness of the roll-out has caused considerable confusion about using the funds among those firms fortunate enough to receive them.

Peter N. Riefstahl is a supervisor at Louis T. Roth & Co., PLLC, a Louisville, KY-based Certified Public Accounting firm that specializes in tax planning, accounting, and business consulting services.