On October 8, 2020, the Small Business Administration (SBA) provided a simplified PPP loan forgiveness application, Form 3508S, for borrowers with loans of $50,000 or less and new guidance concerning these small loans along with form instructions.
The guidance provides that PPP borrowers with loans of $50,000 or less are exempted from any reductions in forgiveness based on:
- Reductions in full-time equivalent (FTE) employees; and
- Reductions in employee salary or wages.
The new application form can be used by PPP borrowers applying for forgiveness on PPP loans with a total loan amount of $50,000 or less, unless those borrowers together with their affiliates received loans totaling $2 million or more.
All borrowers are still required to make certifications and provide documentation for their loan expenses.
There remains a possibility that Congress may provide additional legislation to simplify the loan forgiveness process further, allow tax deductions for forgiven expenses or further clarify the forgiveness rules. We will keep you posted on new legislation or further guidance in this area.
If you would like assistance completing your loan forgiveness application and the necessary supporting documentation, our team is available to assist.
Related Read: Paycheck Protection Program Revised Forgiveness Applications
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.