Good News if Your PPP Loan is for $50,000 or Less

You are likely approaching the time when you will need to apply for Paycheck Protection Program (PPP) loan forgiveness. Here is some good news if your PPP loan:

  • Considered your employees
  • Is for $50,000 or less

If you meet those conditions, your loan forgiveness amount may have increased by 100 percent even though you reduced pay or headcount

Before the $50,0000-or-less rule was instituted, you had to suffer a reduction in loan forgiveness or meet one of many exceptions that allowed you to cut annual salaries or hourly wages by more than 25 percent and/or reduce the number of employees or average hours paid.

Now, with a PPP loan of $50,000 or less, you do not have to consider the myriad of rules about employees. Regardless of what you did with your employees, you qualify for full forgiveness if:

  • Your PPP loan is $50,000 or less
  • You spent the PPP money
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PPP Loan Forgiveness Update

The IRS issued information late last Wednesday “clarifying” rules for deducting expenses that are eligible to be paid with Payroll Protection Pram (PPP) funds.

Although Congress clearly intended for the PPP to be tax-free, the IRS did not follow congressional intent. A month after Congress created the PPP last spring and provided that forgiveness of loans under the PPP should not result in taxable cancellation of indebtedness income for the recipients, the IRS ignored congressional intent by issuing a notice saying that the expenses funded by each such a loan should become nondeductible the moment the loan is forgiven — thereby resulting in exactly the same net tax costs for loan recipients as would have been the case if Congress had not exempted the forgiveness of the loans from tax.

Last week the IRS issued Revenue Ruling 2020-27 saying that even if a taxpayer’s PPP loan has not yet been forgiven … Read More

New EZ Paycheck Protection Program (PPP) Loan Forgiveness Form

The Small Business Administration recently issued the EZ Paycheck Protection Program (PPP) Loan Forgiveness Form, which allows some qualified borrowers to fill out a smaller (a two-page rather than a four-page) form.

The EZ form still requires borrowers to do calculations and provide documentation, but not as much as the full form. (Note that borrowers still need to save documentation for proof of certifications.)

Who can use the EZ PPP Forgiveness form?

The EZ form can be used on any size loan if the borrower can affirm one of the following:

  1. The borrower is 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 salaries in the computation of average monthly payroll in the Borrower Application Form (SBA Form 2483).
  2. The borrower did not reduce annual salary or hourly wages of any employee by more
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