The SBA and Treasury Department Issues the
Application and Instructions on PPP Loan Forgiveness

Marty McCarthy, CPA, CCIFP
Focused on You. Dedicated to Your Success.
May 18, 2020

The Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions on how to complete the application.
 
According to the press release issued by the Department of the Treasury , the loan forgiveness application instructions for borrowers is consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). 
 
The form and instructions contain several measures to reduce compliance burdens and simplify the process for borrowers, including:
  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles.
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30, 2020.
  • Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
 
The SBA said it would issue further regulations and guidance soon to assist borrowers as they complete their applications. Guidance will also be issued for PPP lenders on their own responsibilities soon.
 
The safe harbor to repay PPP loans without penalties expires today. 

We will continue to update you on new developments. Please visit our COVID-19 Resource Page for more alerts.

Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at Richard.Higgins@MCC-CPAs.com . I can be reached at Marty.McCarthy@MCC-CPAs.com . As always, we are happy to help.

Stay safe,

Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company

Source: Department of Treasury Press Release. May 15. 2020.

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).