Public Service Loan Forgiveness Annual Form

Public Service Loan Forgiveness Annual Form

The U.S. Small Business Administration issued a one-page application form aimed at simplifying the process of applying for forgiveness of Paycheck Protection Program loans, along with newly revised and updated forms to conform to the requirements of the latest stimulus legislation. 

The COVID-19 aid package Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout from the coronavirus pandemic. The law requires that the SBA release simplified forms within 24 hours after the bill’s passage into law. This was done to make it easier to apply for forgiveness. The legislation also contained conditions that encourage community banks to lend more particularly to minority-owned businesses who had a difficult time getting loans last year.

Public Service Loan Forgiveness Annual Form

“The Small Business Administration met the requirements to release 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, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published more updated forms.”

First Draw PPP Loan forgiveness terms

Public Service Loan Forgiveness Annual Form – For borrowers who are eligible First Draw PPP loans are suitable to be forgiven. This is if the loan disbursement occurs within an 8 to 24 week period.

  • Pay and worker levels are maintained
  • 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

Second Draw PPP Conditions for loan forgiveness

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

  • The First Draw PPP loan requires that the compensation and employee levels are maintained in the exactly the same manner.
  • The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
  • Minimum 60% of funds go to payroll costs
  • How to request loan forgiveness and when

When all of the loan’s proceeds have been used, a borrower can apply to be forgiven. Borrowers can apply for forgiveness anytime up to the maturity date of the loan. If the borrower does not apply for forgiveness within 10 months of the last day of the period covered and the loan is not renewed, PPP loan payments are no longer deferred, and borrowers will begin making payment to their PPP lender.

Download Public Service Loan Forgiveness Annual Form

Gallery of Public Service Loan Forgiveness Annual Form


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