Feel like you need a flow chart just to figure out which PPP forgiveness application you should use? You’re in luck.
Want to learn more? You can read more about the 3508S and 3508EZ forms below.
Simplified PPP Forgiveness Application (3508S)
If your loan was $50,000 or less you and your business does not have an affiliation with other businesses that collectively received $2 million or more in PPP proceeds you can use the 3508S. Blah, that’s a mouthful.
If you can use the 3508S, stop here – that will be the application that you use for PPP forgiveness.
EZ PPP Forgiveness Application (3508EZ)
If your loan was more than $50,000, let’s see if you can use the EZ form. In order to qualify for the EZ form, you must be able to say “Yes” to at least one of the three items below. We’ve tried to put the SBA’s language in our words below, if you’d like to read their exact checklist you can do so here.
1.) You’re a self-employed individual, independent contractor, or sole proprietor who had no employees at the time of the PPP loan application and did not include any employee wages/salaries when you originally filled out the application.
2.) You did not reduce any employee’s pay by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020.
You did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period. (Ignore reductions that arose from an inability to rehire individuals who were employees on February 15, 2020 if the Borrower was unable to hire similarly qualified employees for unfilled positions on or before December 31, 2020. Also ignore reductions in an employee’s hours that the Borrower offered to restore and the employee refused.)
3.) You did not reduce any employee’s pay by more than 25 percent during the Covered Period or the Alternative Payroll Covered Period compared to the period between January 1, 2020 and March 31, 2020.
You were unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020.
If you were not able to say “Yes” to at least one of the items above, you cannot use the EZ form and will have to complete the regular 3508 form.
PPP Forgiveness Application (3508)
If you don’t fit into the two forms above, you’ll default to this one! But don’t despair. 🙂
Please reach out, we’d love to help!
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Countless assumes no liability for actions taken in reliance upon the information contained herein.