The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying to forgive Paycheck Protection Program loans, as well as newly updated and revised forms to comply with the latest stimulus legislation.
Congress approved the COVID-19 relief package in the month of March that offered $284 billion in funding to small businesses in need of loans. This money was used to mitigate the economic effects of the coronavirus pandemic. The law required that the SBA release simplified forms within the first 24 hours of the legislation’s signing into law. This was to facilitate the application for forgiveness. The legislation also contained conditions to encourage community banks to lend more specifically to minority-owned companies who had a difficult time getting loans in the past.
Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, wrote that the Small Business Administration fulfilled the requirement to publish the PPP form, which is one page long, for loan forgiveness within the first 24 hours from the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued new forms.”
First Draw PPP Terms of loan forgiveness
1099 Ppp Loan Forgiveness – First Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so during the 8- to 24 week period that follows the loan’s disbursement
- The levels of compensation and employee pay are ensured
- The loan proceeds are spent on payroll expenses and other eligible expenses; and
- Minimum 60% of profits go towards the cost of payroll
Second Draw PPP Loan Forgiveness The terms
Second Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week time period after loan payment:
- The levels of compensation and employee pay are maintained in the same way in accordance with the First Draw PPP loan
- The loan proceeds can be used to cover expenses for payroll or other eligible expenses.
- At least 60% of proceeds go to the cost of payroll
- How to apply for loan forgiveness and when
When all of the loan funds have been utilized The borrower may apply for forgiveness. Borrowers may apply for forgiveness at any point up to the date at which the loan matures. If the borrower does not apply for forgiveness within 10 months after the end of the covered period and the loan is not renewed, PPP loans are no longer deferred, and borrowers will begin making monthly payments to their PPP lender.
Download 1099 Ppp Loan Forgiveness
Gallery of 1099 Ppp Loan Forgiveness
