Student Loan Forgiveness Employment Verification Form

Student Loan Forgiveness Employment Verification Form

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

Congress approved the COVID-19 relief package last month and included $284 billion of financing to small businesses in need of loans. The funds were used to offset the economic impact of the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 days after the legislation was adopted to make the procedure of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, particularly for minority-owned businesses that struggled to get loans in the past.

Student Loan Forgiveness Employment Verification Form

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

First Draw PPP Conditions for loan forgiveness

Student Loan Forgiveness Employment Verification Form – First Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8- to 24-week covered period following the disbursement of loan:

  • Employee and compensation levels are maintained
  • The loan funds are used on payroll costs and other eligible expenses; and
  • A minimum of 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week time period after loan payment:

  • Pay and worker levels are maintained in the same manner as required for the First Draw PPP loan
  • The loan proceeds can be used to pay for expenses for payroll or other eligible expenses.
  • At least 60% of profits go towards expenses for payroll
  • How to apply for loan forgiveness and when to apply

When all of the loan’s proceeds have been used the borrower is eligible for forgiveness. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the covered period the PPP loans are not deferred any longer, and borrowers will begin making payment to their PPP lender.

Download Student Loan Forgiveness Employment Verification Form

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