Public Student Loan Forgiveness Employement Certification Form

Public Student Loan Forgiveness Employement Certification Form

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, along with newly revised and updated forms to comply with the most recent 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 funds were used to offset the economic impact of the coronavirus outbreak. The package also mandated the SBA to issue streamlined forms within 24 days of the legislation being signed into law to simplify the process of applying for forgiveness. It also included conditions meant to encourage more bank loans by community banks, specifically for minority-owned businesses that struggled to get loans last year.

Public Student Loan Forgiveness Employement Certification Form

“The Small Business Administration met the requirement of releasing the single-page form for the forgiveness of PPP loans by 24 days after the date of enactment 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 updated forms.”

Forgiveness terms in the first draw of PPP loans

Public Student Loan Forgiveness Employement Certification Form – First Draw PPP loans made to eligible borrowers qualify for complete loan forgiveness if they do so within the 8-to 24 week period that follows the loan’s disbursement

  • This is also true for compensation and employees.
  • The proceeds from the loan may be used to cover expenses for payroll or other eligible expenses.
  • A minimum of 60% of the profits go towards expenses for payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans granted to eligible borrowers qualify for complete loan forgiveness, if within the 8to 24-week duration following loan payment:

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

Once all of the loan’s proceeds have been used, a borrower can apply for forgiveness. Borrowers can request forgiveness at any time until the date of maturity. If the borrower does not apply for forgiveness within 10 months of the end of the covered period, then PPP loan payments are no longer deferred and the borrower will be required to make monthly payments to their PPP lender.

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