The PPP is part of the $2.2 trillion CARES Act and offers small businesses forgivable loans to cover up to eight weeks of payroll costs. The program has already funded almost 5.1 million loans worth more than $521 billion. For now, small businesses may still apply for the remaining $130 billion through August 8.
This week, the Small Business Association and Department of the Treasury finally released a 10-page document to address 23 of the most frequently asked questions from borrowers on PPP loan forgiveness. The new guidance includes four sections which cover how to calculate how much of your PPP loan may be forgivable. These sections include general loan forgiveness, payroll costs, non-payroll costs, and loan forgiveness reductions.
While you may be eager to complete the PPP loan forgiveness process, there are still some lingering questions. As the Journal of Accountancy reports, we don’t have all the necessary details—like the complete guidance on loan forgiveness reductions work for full-time equivalent (FTE) employees.
There has also been some discussion about broader PPP loan forgiveness in the next stimulus bill. The Washington Business Journal says more lawmakers have been pushing to forgive smaller PPP loans. Senate Republicans included automatic forgiveness of loans below $150,000 in the HEALS Act—along with some forgiveness options for loans between $150,000 and $2 million—but we won’t know for sure until Congress agrees on a new deal.
In the meantime, you may start the application for PPP loan forgiveness process with this free tool from the American Institute of CPAs (AICPA) and CPA.com—but you should wait until we have the complete details to submit Form 3508EZ.