Form 982 Student Loan Forgiveness

Form 982 Student Loan Forgiveness

The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms to meet the requirements of the latest stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and provided $284 billion of funding to small businesses that needed loans. The money was intended to reduce the economic burden of the coronavirus epidemic. The law requires that the SBA issue simplified forms within the first 24 hours after the bill’s passage into law. This was to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more, especially to minority-owned businesses who were unable to obtain loans in the past.

Form 982 Student Loan Forgiveness

“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans within 24 days of the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner at Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published additional updated forms.”

Forgiveness terms for the initial draw of PPP loans

Form 982 Student Loan Forgiveness – For borrowers who are eligible, First Draw PPP loans are qualified to be forgiven. This is when the loan payment is made within an 8 to 24-week period.

  • Employee and compensation levels are ensured
  • The loan proceeds can be used to cover payroll costs or other eligible expenses.
  • A minimum of 60% of the proceeds go to the cost of payroll

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans for eligible borrowers can be qualified for loan forgiveness when the loan is repaid within an 8 24-week time frame.

  • Pay and worker levels are kept in the same way as is required for the First Draw PPP loan
  • The proceeds of the loan could be used to pay for payroll costs or other expenses that are eligible.
  • At least 60% of the profits are used to pay for payroll expenses
  • How do I apply for loan forgiveness , and when to apply

When all of the loan funds have been utilized The borrower may apply to be forgiven. The borrower can apply for forgiveness at any point up to the date at which the loan matures. Borrowers who do not request forgiveness within 10 months after the date they will be able to repay the loan are able to receive the loan payment from their PPP lender.

Download Form 982 Student Loan Forgiveness

Gallery of Form 982 Student Loan Forgiveness


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