How To Record Ppp Loan Forgiveness In Quickbooks

How To Record Ppp Loan Forgiveness In Quickbooks

The U.S. Small Business Administration has released a single-page form that aims to simplify the application process for the forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms that conform to the requirements of the most recent stimulus legislation. 

The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The legislation required that the SBA release simplified forms within 24 hours after the bill’s passage into law. This was to simplify the process of applying for forgiveness. It also included conditions that would encourage banks in the community to lend more specifically to minority-owned companies that had difficulty getting loans in the past.

How To Record Ppp Loan Forgiveness In Quickbooks

“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP within 24 hours of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published new forms.”

Forgiveness terms for the initial draw of PPP loans

How To Record Ppp Loan Forgiveness In Quickbooks – For those who qualify, First Draw PPP loans can be qualified to be forgiven. This happens when the loan is disbursed within an 8 to 24-week timeframe.

  • It’s the same for employee compensation and the.
  • The loan proceeds can be used to pay payroll costs or other eligible expenses.
  • A minimum of 60% of proceeds are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness, if within the 8to 24-week time period after the loan’s disbursement

  • Pay and worker levels are kept in the same way in accordance with the First Draw PPP loan
  • The loan funds could be used to pay expenses for payroll or other eligible expenses.
  • Minimum 60% of funds go to payroll costs
  • What is the best time to apply for loan forgiveness?

Once all of the loan proceeds have been used, a borrower can apply to be forgiven. The borrower can request forgiveness at any time prior to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months of the end of the time period that was covered and the loan is not renewed, PPP loans are no longer deferred and borrowers will begin making payment to their PPP lender.

Download How To Record Ppp Loan Forgiveness In Quickbooks

Gallery of How To Record Ppp Loan Forgiveness In Quickbooks