Filling Out The Public Service Loan Forgiveness Form Question 13

The U.S. Small Business Administration released a one-page form that aims to simplify the process of applying for the forgiveness of Paycheck Protection Program loans, along with newly updated and revised forms that comply with the latest stimulus legislation. 

The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus pandemic. The package also mandated the SBA to issue streamlined forms within 24 hours of the bill being adopted to make the procedure of applying for forgiveness. It also included conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses that had trouble getting loans last year.

Filling Out The Public Service Loan Forgiveness Form Question 13

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the obligation to issue the one-page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms that were updated.”

First Draw PPP Terms of loan forgiveness

Filling Out The Public Service Loan Forgiveness Form Question 13 – First Draw PPP loans given to borrowers who meet the criteria are eligible for total loan forgiveness within the 8 to 24-week period after the disbursement of loan:

  • It’s the same for pay and benefits for employees.
  • The loan proceeds are used on payroll expenses and other eligible expenses; and
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24-week time period after loan disbursement:

  • Employee and compensation levels are kept in the same way as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll costs and other expenses that are eligible and
  • A minimum of 60% of the proceeds are used for the cost of payroll
  • When and how do I apply for loan forgiveness?

A borrower may apply for forgiveness once all loan proceeds to which the borrower has applied for forgiveness have been utilized. Borrowers can request forgiveness at any point up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 months of the end date of the loan are eligible to receive loan payments from their PPP lender.

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