Public Service Loan Forgiveness Employment Verification Form

Public Service Loan Forgiveness Employment Verification Form

The U.S. Small Business Administration has issued a one-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus legislation. 

The COVID-19 aid package Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgivable loans to help them cope with the economic fallout from the coronavirus pandemic. The legislation required that the SBA provide simplified forms within 24 hours of the signing into law. This is to make it easier to apply for forgiveness. It also included conditions to encourage banks in the community to lend more particularly to minority-owned businesses who had a difficult time getting loans in the past.

Public Service Loan Forgiveness Employment Verification Form

“The Small Business Administration met the requirement of releasing the one-page form for the forgiveness of PPP loans within 24 hours of the date of the 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 new forms that were updated.”

Terms for forgiveness for the first draw of PPP loans

Public Service Loan Forgiveness Employment Verification Form – First Draw PPP loans granted to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so within the 8-to 24 week period that follows loan disbursement:

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

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24-week covered period following loan payment:

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

The borrower is eligible for forgiveness only after the loan’s proceeds for which the borrower has applied for forgiveness have been used. Borrowers are able to apply for forgiveness at any time prior until the date of maturity of the loan. Borrowers who do not request forgiveness within 10 month after the date they will be able to repay the loan are eligible to receive loan payments from their PPP lender.

Download Public Service Loan Forgiveness Employment Verification Form

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