Military Spouse Student Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the latest stimulus legislation. 

Congress approved the COVID-19 relief package last month, which included $284 billion of financing for small-scale businesses who needed loans. The funds were used to mitigate the economic effects of the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 days of the bill being approved by the lawmaker to streamline the application process for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned companies that were unable to obtain loans in the past.

Military Spouse Student Loan Forgiveness

“The Small Business Administration met the requirement of releasing the single-page form for PPP loan forgiveness within 24 hours 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 released the updated forms.”

First Draw PPP Terms of loan forgiveness

Military Spouse Student Loan Forgiveness – For eligible borrowers, First Draw PPP loans can be suitable to forgive loans. This happens if the loan disbursement occurs within an 8 to 24-week timeframe.

  • The levels of compensation and employee pay are maintained
  • The proceeds from the loan may be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of the proceeds are used to pay for payroll expenses

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans to eligible borrowers are eligible for loan repayment if the loan is paid within an 8 24-week time frame.

  • The levels of compensation and employee pay are maintained in the same manner in accordance with the First Draw PPP loan
  • The loan funds are used on payroll expenses and other eligible expenses; and
  • A minimum of 60% of the funds go to the cost of payroll
  • How to apply for loan forgiveness , and when to apply

When all of the loan proceeds have been used, a borrower can apply to be granted forgiveness. Borrowers can request forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the time period that was covered, then PPP loans are no longer deferred and the borrower will be required to make payment to their PPP lender.

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