PPP Loan Forgiveness Reports Breakdown

There are two forms that a client must use to complete the PPP Loan Forgiveness Application. Clients can choose which form they would like to use. See below:

PPP Loan Forgiveness Application Form (Revised form)

https://home.treasury.gov/system/files/136/3245-0407-SBA-Form-3508-PPP-Forgiveness-Application.pdf 

EZ 3508

https://home.treasury.gov/system/files/136/PPP-Loan-Forgiveness-Application-Form-EZ-Instructions.pdf

• Clients can use the 8 week look back period or 24 look back period.
  • If a client received their loan BEFORE 6/5/2020 they must use the 8 week look back
    period.
  • Clients who received their PPP loan AFTER 6/5/2020 will use the 24 week look back
    period.

Payroll Cost Report

Payroll cost report will provide the required totals for client to complete the PPP Schedule A form within the PPP Loan Forgiveness application.

• Lines 1, 4, 6, 7, & 8 totals will be pulled from the payroll cost report
• Select Date Range - use the dates for the covered loan period- either the 8 week period or 24 week period.
  • Line 1 >> SBA Total Gross Pay under $100K
  • Line 4 >> SBA Total Gross Pay over $100K
  • Line 6 thru 8 >> Grant total of ER Health Benefit, ER Retirement Plan, & ER Retirement (line 7), ER State/Local Taxes (Line 8)

FTE Comparison Report

• FTE = Average 40 Hours per week worked
• Average FTE for each employee to determine if there was a reduction in the FTE’s during the covered period and each of the covered periods
• Maximum for each EE is capped at 1.0

Time Periods:

• Covered Period >> PPP Loan funds were used
• Lookback Period 1 >> Total Hrs (divided by the )total weeks in the period (divided by the) 40 hrs
• Lookback Period 2 >> Any EE that has an average of 40 Hrs or more = 1.0 FTE and any hourly EE that averages less than 40hrs per week = 0.5 FTE (Any hourly EEs that are Part time EEs are considered part time FTE will be 0.5 FTE)                                                                                                                           
• Client will want to use the highest quotient to enter on the PPP Schedule A and enter the totals all the way across for the highest quotient that is chosen to complete the PPP Schedule A form.

• Line 2 >> Covered Period Total under $100K FTE
• Line 5 >> Covered Period Total over $100K FTE
• Line 11 thru 13
  • If the client did not reduce any EEs during the covered period or the number for the compared you chose (see below screenshot), is 1.0 or greater check the box that reads “check here”, skip lines 11 & 12, and enter 1.0 on line 13.
  • If your highest compared number is less than 1.0 proceed to lines 11, 12, and 13

• Line 11 >> enter the Grand total for the lookback period and calculation you choice previously.
• Line 12 >> Grand total under the column covered period and the calculation option you chose previously.
• Line 13 >> The number for the Compare choice the client chose previously >>if greater than 1.0 then enter 1.0 on line 13. (NOTE: If compare value is less than 1.0, this will lower forgiveness amount)

EZ Form

Determine if you can use the EZ form by the below qualifications:

Safe Harbor: FTE reductions occurred between February 15, 2020 and April 26, 2020. If the client restores the employees’ wages by the end of the Safe Harbor, clients will not experience wage reduction for those employees.

Wage Comparison: Provides and compares wages for all employees between the lookback and covered periods.

• “Over 100K in 2019”>> this column shows the pay date when the EE went over the $100K annualized limit in 2019 or 12/31/2019 date is over for the entire year. (Government stated employers do not need to measure wage reductions of any employee that has earned over $100K annualized in a pay period in 2019)
  Example: If a weekly employee made over $1923.08 in a pay period at any time in 2019, = no wage reductions for that employee.